HOLYOKE, Mass. - Holyoke CU here dodged delinquencies by weeding out bad loans originated by automobile dealers–and later quickly pulling out of the subprime auto loan market–thanks to instant reports generated by a business intelligence (BI) tool.
The $110-million CU started using the InfoVision2 reporting database nearly four years ago to track its indirect lending portfolio according to dealer originations, loan types, FICO rates and delinquencies. InfoVision2 is part of the INSIGHT core system offered by Avon, Conn.-based COCC.
“By efficiently tracking delinquencies, we could pick off dealers that were sending us junk and therefore reduce the delinquencies,” explained Jay Wolohan, EVP at Holyoke CU. “We were surprised how some of the larger dealers had learned how to work around the system.”
Later, Holyoke CU decided to try its hand at subprime auto loans. But InfoVision2 revealed that the subprime market wasn’t such a good idea, Wolohan said.
“The delinquencies were really high,” he said, “but we were able to pull right out of the subprime market thanks to the reporting tool.”
InfoVision2 came at the right time for Holyoke CU, according to COCC. Dealer originations and subprime loans were coming in fast and furious. “The portfolio was growing, the product areas were relatively new, and this tool was an important part of managing the portfolio,” said Bob Bessel, PR-director at COCC.
Soon, Holyoke CU hopes to boost cross-sales by using InfoVision2 to analyze its mortgage portfolio.
“We can find out if a member has a mortgage with us but doesn’t have anything else,” said Wolohan. “Then we’ll start marketing to acquire checking accounts. Eventually, we’ll look at who is a homeowner and doesn’t have a mortgage with us.”
BI helps hone marketing attempts, he continued. “Data analysis is better than just putting an ad in the paper.”
Wolohan custom-builds InfoVision2 reports by pulling data categories from the INSIGHT core system, including transaction, account and demographic data. “The number of data fields you can use is infinite, but it only takes about five minutes to build a monthly snapshot.”
Previously, the CU manually entered loan data into spreadsheets to create homespun reports, said Wolohan. The process wasn’t efficient, he said: “We didn’t really have a picture of what our credit quality was.”
Whereas the InfoVision2 tool that Holyoke CU uses is built to extract data on a periodic basis, COCC’s has a newer reporting tool, Total Vision, that pulls data on a daily basis, said Bessel.
Total Vision, which supports an ongoing dashboard view of the organization, is targeted at credit unions that have already mastered basic BI tools, he added. Both systems pull data that can be accessed via interfaces with Business Objects or Microsoft Access.
The credit unions that are good at BI are the ones that “embrace reporting” and are able to ask themselves the right questions, added Matt L’Heureux, AVP-client services at COCC.
“They are able to focus on a business issue and ask questions that are related to current business decisions,” he said. “The questions usually come naturally once they start looking at the reports.”
Wolohan agreed: recently, Holyoke CU started asking questions when a local plant closed and wanted to reach out to members that had been employed at the plant.
“We started to write them a letter to let them know we wanted to work with them during that difficult time, but then realized we weren’t capturing the data we needed to do that,” he said. “We had to ask ourselves, what information are we looking to capture and use in the future?”
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For info on this story:
* www.holyokecu.com
* www.cocc.com
