3 Questions for Data Migration Success

The reputation of banks as formal institutions and credit unions as friendly ones may remain debatable until perpetuity. However, credit unions refer to customers inclusively as “members.” Membership is a proud distinction credit unions have stood by since their inception.

Credit unions understand their members expect a lot. After all, they occupy a special place in the financial world, and it is the responsibility of a credit union’s management to ensure its entire organization understands the distinction.

Vast and ever-growing databases of member information create a plethora of opportunities for credit unions to help better serve their members. To take your credit union to the next level, your management team should consider three important questions from a member’s perspective:

1. What benefits do members receive when a credit union migrates data to a new program?

Almost nothing interests members as much as getting a loan they need promptly. Your credit union’s ability to make quick judgments will please members, while consistent and quality-based decisions satisfy your organizational goals. The technology platform you choose influences all variables involved in the loan-making process. When you migrate to a platform that requires no manual review, you can automate approvals or denials with the same accuracy your underwriters provide. Loan officers are free to spend their time more productively, focusing on the loans that you want the most as well as focusing on members’ needs.

In an October 2019 CU Times article, Vero’s James McCabe recommended developing an environment of certainty that reassures members of your ability to safely manage their accounts. When you undergo a data migration to the right platform, you ensure the system will protect members “beyond the walls of your institution.” Your new platform can embed valuable protective services into your financial account offerings and provide security that satisfies member demands.

The continued ability to service members beyond the confines of brick-and-mortar branches has never been clearer than it is today. Globally, the coronavirus pandemic has shuttered businesses of all kinds. Businesses with robust contingency plans and strong data management systems will be better adapted to weather the brutal economic toll to come. Those that are not prepared but still survive the pandemic will certainly understand the value in investing in data management.

2. How can data on a stronger system offer different ways to serve credit union members?

Changes in the financial climate since the financial crisis of 2008 restricted banks and credit unions from taking an aggressive approach to satisfy the public’s demand for credit. Traditional methods required customers to fit a certain profile that banks and credit unions targeted. The approach avoided offering loans to anyone who had a poor credit history.

However, emerging trends require banks and credit unions to face increased pressure to compete for loans for vehicles, business and real estate from a wider pool of competition. Competitors are specifically targeting loans such as lines of credit for home repairs and education – traditionally a second or third product for current members – as stand-alone products. With tight restrictions opposing increased competition, the need to cross-sell has never been more important.

The advantages of a stronger data system stem from the increase in help it can provide to identify specific cross-sell opportunities. Faster detection of new loan opportunities can allow your credit union to quickly deploy preferred terms to your members and generate more income for your institution. With support for refinancing cards and loans, you can even appeal to members who do business with your competitors.

Cross-selling opportunities are not limited to loans. Accurate and reliable data mining lets you compete for IRAs and investment opportunities. An intuitive system can match your products with the services that your members desire. Your technology team will be able to present a unified and consistent approach to cross-selling with a system that provides scripts describing the advantageous features of the products you want to sell.

Although the overall number of credit unions in the United States has slightly declined since 2016, those that manage assets of more than $1 billion have increased at the same time. You may view the statistics as a challenge or an opportunity, but they show that growth can occur under the right circumstances. The number of credit unions with more than $1 billion under management increased from 263 in 2016 to 315 by early 2019.

3. What does the process of migrating one data processor to another entail?

While the process of migrating data may not equal the difficulty of changing a tire on a moving vehicle, it can seem almost as problematic. The expertise of your technology team can make all the difference. Pain points you may encounter during the transition include your domain name with cloud implications, security certificates, search engines, links and email. The process of moving your data and transferring your operations is a massive undertaking, but you can cope with it when you anticipate the pitfalls and know what to expect.

According to Information Week, critical pitfalls can occur from failing to test the process of data migration. Decisions made along the way can determine who has the responsibility for testing and validating, and this must take place throughout the process, not only at the end. Other considerations include the risk of losing or corrupting data, more downtime than you expect, application instability, migration sequencing and premature use. Your core processor choice is key for transitioning and protecting member data when faced with these issues. While the pitfalls may seem discouraging at first, you can overcome them by developing an organized plan of attack.

The data migration planning process does not present an option that can be chosen without careful consideration. The risks can seem insurmountable, but you can ensure a safe migration by planning each step before you take the first one. In addition, for every step planned, have a contingency plan in case its execution doesn’t meet your expectations.

The NCUA’s 2018 data presented some statistics that may guide your decision to grow by improving your data systems: Median loan growth through June 2018 for federally-insured credit unions reached 5.4% and median asset growth topped 2%. Opportunities are there for the taking – and the right data management program may be the competitive advantage your credit union needs.

Richard Gallagher is CEO of Oak Tree Business Systems, Inc. in Big Bear Lake, Calif.