Want to Leverage Your Data? Fill Your Knowledge Gaps First

Data is one of the most robust assets any enterprise can have, and credit unions are in a fortunate position to have a plethora of it.

When connected, data can produce valuable insights. With this knowledge comes the ability to change, innovate and improve processes. This knowledge also allows a credit union to get in front of its members and deliver what the member wants when they want it. This is the power of digital transformation.

Transformation does not occur with the purchase of technology and a hand-off to IT. It is an enterprise endeavor. Paul Lenoradi, a University of California at Santa Barbara professor of technology management, describes this transformation as a “process that doesn’t occur from sparkling rhetoric and bold promises … but from decisions made by employees on the front lines.”

Thomas Siebel, author of “Digital Transformation: Survive and Thrive in an Era of Mass Extinction,” has called transformation the “next do-or-die imperative,” adding, “How CEOs respond will determine whether their companies thrive or perish.” And David Rogers, author of “The Digital Transformation Playbook,” has identified the five domains of digital transformation as:

• Customers;
• Competition;
• Data;
• Innovation; and
• Value.

The credit union industry version of digital transformation encompasses the following:

Enterprise Vision 

• Identifying “why” the credit union is harnessing the data;
• Creating a future state that can be achieved in a reasonable time frame and via a beneficial framework; and
• Leveraging internal and external talent to create a transformation village.

Member Focus 

• Identifying members’ financial goals;
• Identifying friction, competition and disruption in the member ecosystem; and
• Envisioning a future member state and data use case.

Data Maturity 

• Assessing the data maturity of the credit union;
• Building a data governance foundation; and
• Identifying the tools needed today and tomorrow.

Talent 

• Building a data analytics consumption capability; and
• Strengthening innovation processes and mindset.

Continuous Capabilities 

• Creating valuable roadmaps;
• Building centers of excellence; and
• Creating workplace adoption.

Transforming a credit union is no simple task. A recent survey performed by MX found that 92% of credit unions do not leverage their available data effectively. Consulting firm McKinsey cited the top five reasons why data efforts fail as:

1. Lack of clear data strategy (only 30% of financial institutions surveyed by McKinsey had a data strategy).

2. Inability to translate data strategy into tangible use cases.

3. Not having clear road maps.

4. Not having foundational data governance.

5. Not leveraging their talent to translate data into valuable action.

For a credit union to be successful with data, it must acknowledge its organizational data knowledge gaps. It is difficult to move forward when it feels like no one is speaking the same language. Understanding the core competency in data knowledge will only strengthen a credit union’s success in launching a data effort.

To build proficiency in a data core competency, a credit union should identify its current knowledge gaps. Here is a list of educational domains that can elevate a credit union’s enterprise data success:

• Enterprise data vision;
• Member-centered data use case;
• Understanding/defining data maturity;
• Essentials of data governance;
• Creative data consumption by enterprise talent; and
• Workplace adoption of data.

Assess the leadership team on their understanding of these domains. In most cases, credit unions have some elements of each domain but are not formally leveraging their knowledge. Once the credit union understands where the knowledge gaps are, it can build an educational program to fill those gaps. Education can come from various sources, including books, articles, webinars and online classes. Make sure the education is credit union industry-specific and offers application of the knowledge.

For true data success, take the time to build up a data knowledge capability. It will pay back in dividends.

Anne Legg is the Founder of THRIVE Strategic Services, a San Diego, Calif.-based company that assists credit unions with data transformation, and author of “Big Data/Big Climb,” a credit union playbook for data transformation.