North Shore Credit Union Creates Profitability Scorecards

At first glance, it doesn't look like North Shore Credit Union is growing all that fast, or at all — a look at its roster in 2012 and 2000 would reveal it's had about 40,000 members the entire time. But during that time, assets have grown from $600 million to $2.6 billion.

For Fred Cook, that's the plan.

"We want the share of wallet to increase, and we're using new formulas to look at our client base in a different way," says Cook, chief information officer of the Vancouver, BC-based credit union.

North Shore is in a very competitive market that includes the country's large banks, and over the past couple of years other credit unions. It has always relied on retention and relationship growth rather than new customer acquisition. "We don't advertise on rates or have deposit sales. We use formulas that target certain segments based on information from our existing members," Cook says. "We live and die by segmentation."

But that strategy is not as easy as it used to be for financial institutions. To respond to the tougher environment, North Shore is expanding its profitability calculation power by integrating its core banking platform with expanded CRM, business intelligence, data mining, and workflow standardization.

In a new project, the credit union — which uses Temenos' hosted T24 system as its core banking system — is using Insight, another Temenos product, to accumulate financial relationship, transaction and customer data, then turn that data into profitability performance figures that can inform marketing, sales and service for individuals and segments of consumers. The credit union identifies its most profitable segments as "assigned" segments. About 8,000 members are currently in that "assigned" bucket, and the credit union hopes that a system that can quickly locate the highest performing financial option for members based on current and past performance will result in more consumers transferring upward to the "assigned" bucket.

The data used in this analysis comes from several third-party sources. For example, North Shore outsources the delivery of credit products to a division of TD Bank, contracts with Credential Securities to deliver investment products, and has similar arrangements with third parties for insurance and other financial products. The credit union's internal advisors route members to these third parties based on information gained from demographic segmentation derived from customer data and direct consultation.

To execute the advanced Temenos-driven analysis, the credit union will examine performance of these financial products on various cycles, such as daily, monthly, and quarterly. That data, gathered from the third parties, will be feed into the credit union's core system and distributed to North Shore's top executives, as well as into marketing, CRM and customer service systems in a standardized format.

The credit union hopes to eventually provide sales and service reps with similar dashboard views of members that include updated information on member's financial holdings, relationships with the credit union and how those relationships are performing. This information will also be communicated to the credit union's executives and eventually members and other staff as a profitability scorecard for consumers and segments. "People are motivated by how they get measured," Cook says. "The scorecards are a system that encourages the right behaviour. It's one thing to sell products, but it's another to see the benefits of these products."