Revolutionizing Member Engagement: The Power of Data & AI in the CU Landscape

As credit union leaders, we are experiencing a foundational digital shift in the financial services industry. Old ways of serving members are making way for novel, more efficient approaches. This transformation isn’t just on the horizon – it’s here, promising opportunities for those ready to embrace it. For all credit unions, the message is clear: To continue providing exemplary service and stay relevant, we need to navigate the digital tide and tsunami of data. It’s not just about staying afloat, it’s about riding the wave to deliver an even better member experience.

The increasing pervasiveness of personalization in our daily lives, driven by digital giants like Amazon, Netflix and Spotify, has significantly altered consumer expectations. Personalized experiences have moved from being a “nice-to-have” to a daily expectation. For credit unions to thrive in this environment, they must leverage member data to deliver personalized products, services and experiences.

At Coastal Credit Union, we have seen first-hand the transformative potential of predictive analytics and artificial intelligence in providing meaningful experiences. We are partnering with innovative, new AI-focused fintechs whose analytics have led to quadrupling of new account openings and 30% higher initial balances. These significant improvements can be attributed to our data-driven, personalized marketing approach.

We are combining first-, second- and third-party data with a variety of predictive modeling approaches.  Our internal teams and fintech partners use everything from simple heuristic methods to advanced machine learning techniques like random forest models. These diverse datasets, which we already have coupled with new, modern analytical methods, give us the ability to quantify our member participation and determine each member’s propensity for new products or risk of churn. We can then use this to provide the right product offerings to the right members so they are receiving the relevant content they want and need for their financial lives.

AI’s capability to sift through vast amounts of data and identify patterns enabled us to discern member preferences, predict their needs and design offers that resonate on an individual level. Not only did this result in higher conversion rates, it also led to more substantial initial deposits, indicating a deeper trust and higher engagement from our members. By focusing on what our members genuinely want and need, we can serve them better and more efficiently, simultaneously boosting our business growth. This targeted approach is a testament to the power of AI technologies in amplifying the impact of personalized marketing. In an era where consumers are inundated with offers and information, it is essential for credit unions to stand out by offering tailored solutions that truly meet members’ needs. AI not only facilitates this but also ensures that our campaigns are backed by data-driven insights, thereby significantly enhancing their impact. The strategies and technologies we have embraced are not exclusive to us at Coastal. The entire credit union movement can – and must – leverage them to compete effectively with large banks and digital-only providers.

Taking an analytical approach to member data can significantly improve service delivery. Understanding the preferences, habits and needs of each member allows for targeted communication and product recommendations, enhancing the member experience and boosting operational efficiency. Predictive analytics and AI can arm your marketing teams with the insights needed to create more relevant content and identify cross-serving opportunities. In essence, your member data becomes a goldmine of opportunities to provide a more efficient and personalized service. I certainly believe that leveraging technology doesn’t mean letting go of the personal touch that defines credit unions. Our journey at Coastal has shown that integrating AI with our human teams has enhanced their ability to serve members, not replace them. AI-driven insights enable our team members to deliver a personalized experience across all channels, from digital to physical branches.

Looking to the future, technologies like generative AI offer promising avenues for even more personalized experiences. This isn’t a far-off reality but a tangible, achievable goal that can help credit unions deliver exceptional member service. Current generative AI solutions are already providing marketing teams with valuable initial drafts for written and visual member marketing content that can make each marketing interaction so much more relevant and impactful for members. These technologies are improving every day, and we are only in the first inning of leveraging these powerful new tools to make our marketing and growth teams even more effective in serving our members. There are many other use cases for this new technology that our industry can and should begin testing and learning in 2023 and beyond.

It is time for credit unions to embrace this transformation proactively. While the journey may seem daunting, the potential rewards are immense. Digital transformation is no longer a choice but a necessity for survival in an increasingly digital world. The path to relevance and success in this new era of financial services lies in harnessing the power of data, predictive analytics and AI. As we continue our journey at Coastal, we look forward to sharing our successes and learning with the broader credit union community. After all, our collective success hinges on our ability to adapt, innovate and serve our members better in this dynamic landscape.

TJ Wyman is Chief Digital Officer for the $4.8 billion, Raleigh, N.C.-based Coastal Credit Union.