During the last 10 years financial institutions have attempted, with varying degrees of success, to focus on business intelligence; the ability to gather, understand and use information relevant to their operations. Business intelligence is essential in helping a financial institution, providing the means to stay ahead of its competition by supporting the means to quicker, measurable, accurate and more informed decision-making.
A shift, however, has been occurring. Business intelligence is no longer aimed at just providing operational information to the institution. It is also now directed at providing the credit union with intelligence that can be turned into a proactive service opportunity directed at members in the form of additional, appropriate products and services that save members time and money and help them reach their individual financial goals.
Consider Your Members
Internally, business intelligence enables managers and executives to make better decisions that translate into increased member wallet share. It also facilitates information sharing across the entire operation. The development of electronic channels has however, shifted the focus of the application from the business to the member. Members want choice, control, self-service options and the ability to make purchasing decisions or perform transactional activities according to their own schedules. They want more information regarding their financial relationships and become frustrated if they are unable to find what they need.
Credit unions must, therefore, now focus externally on the member to provide "value" in the form of products and services that the members want and need, when they want and need them. Credit unions must not only continue to develop internal business intelligence expertise, but must also rise to the new challenge of using that intelligence to improve member relationship management. This means using member information and behavior analysis to support relationship management for the credit union and the member. While the credit union may have increased membership and improved member wallet share as its goal, the members likely have increased efficiency, effectiveness and convenience as their goals.
Tools that support member self-awareness and promote member choice and control will help them manage their own relationships, transact business and purchase products when they can save time and money and achieve their respective personal or business goals.
Data Becomes Information
Business intelligence tools, such as MCIF systems, are designed to turn the endless amount of data produced by financial institutions into something meaningful. The focus of MCIF should be on leveraging the system throughout a credit union and not just within the marketing department. Ensuring full integration with the core system will also lead to full utilization of the valuable data stored there.
Certain business intelligence tools utilize data warehouses to extract and analyze data. These tools can help credit unions understand their financial performance by providing answers to questions about income, expenses, assets and liabilities using data extracted from the core database. The resulting analysis helps make decision-making more apparent for those involved with operational issues. Other business intelligence tools offer ways for credit unions to analyze and understand transaction trends and patterns, addressing such questions as how, when, where and at what time members are performing transactions inside and outside the credit union.
Additional tools can provide an understanding of member behavior on the use of existing loan products which can improve lending policies and practices, delinquency patterns, product offerings and loan profitability. Whatever the area of focus, business intelligence tools should leverage the backbone of a credit union by extracting core data to help capitalize on the rich information available.
Many credit unions are now reaping the benefits of more informed analyses of increased types of data to determine how to better serve their members.
Armed with valid information, credit unions can now take this intelligence and apply the results to Member Relationship Management (MRM). MRM provides a seamless approach to intelligently managing the member's entire relationship with a credit union. With this knowledge, the credit union can provide superior and consistent service and follow-up using contact management and problem resolution features to ensure each employee has the same view of each member and understands their history with the institution. In addition, MRM provides the ability to anticipate member needs using marketing and campaign management to not only identify these candidates, but also to ensure the right members are targeted for cross selling activities. This approach enables credit unions to ensure they are deploying their resources appropriately and achieving the expected return on the activity.
The Complete View
MRM solutions need to provide a complete view of each member relationship including demographics, relationship profitability, product purchase propensity and promotional contact history. To accomplish this, MRM solutions must fully integrate with the core system in addition to the credit union's MCIF to provide access to such information as the member's entire household relationship and overall profitability. This information arms the credit union with even more decision-making capability when searching for sales and service opportunities
Financial institutions that focus on creating intelligence, while simultaneously turning that intelligence into action, will reap the benefits by giving members more reasons to transact business with their CU.
David McConney oversees daily operations for the Credit Union Core Systems business of Harland Financial Solutions. He can be reached at david.mcconney
