New Tool For Determining Who Actual Competitors Are
A new product has debuted to help credit unions peer into what "the bank down the street" is about to bring to market.
Brian Kidwell, research vice president at D. Hilton Associates Inc., said that there is "a large opportunity" in helping credit unions see what banks-which he referred to as the credit unions "real" competitors-are up to. In response, D. Hilton has introduced its DHA Market Share Report.
Kidwell noted credit unions have significant data available to them on the activities of other credit unions, such as through NCUA's database, but said the "one thing our clients lack" is enough data on banks.
"In very few markets credit unions compete against credit unions," he said.
He said D. Hilton is combining NCUA data with reports from the Federal Deposit Insurance Corp. (FDIC) to develop a database showing marketshare by loans and deposits that banks and credit unions have in a given market.
"Let's say a community credit union in L.A. wants the breakdown," he explained. "The credit union may think it did well if it had 5% growth in deposits while other credit unions their size did 5% as well, but maybe all the market in L.A. had a 15% increase."
That knowledge, said Kidwell, will help the credit union identify who its real competitor is in the market. For instance, he said a small credit union may believe a leading national bank is dominating the marketplace but may discover it is a smaller, local bank that has been particularly successful in penetrating the community. Such knowledge will help avoid reacting to the wrong competitor and pursuing a mistaken strategy, he said.
Credit unions that want to look themselves at the FDIC data and interpret it may not be as efficient because the work is not in retrieving the data but in interpreting and combining, he said. So much data is already available that no complementary surveys are needed, Kidwell said.
The data is arranged so that it can help a credit union answer questions such as, "Who's getting the mortgages?," "If I spend on advertising, will I get a return?," "Am I stealing from other competitors?," and "Who is losing market share?"
The data made available is approximately 90 days old. "We are at the mercy of reporting (by the NCUA and FDIC)," said Kidwell of the quarterly reporting requirements. "It's done as quickly as it can possibly be" once the reports are available, he said.
Kidwell declined to provide figures on the cost of the DHA Market Share Report other than saying "it will depend on the size of the credit union and the number of markets that need to be looked at." He said the company has made presentations on the product to approximately one-dozen potential clients to date that have "shown serious interest."
There may be a standard product for 30 to 50 markets as "we want to make it affordable for credit unions," he said.
The data to be provided will exclude financial service providers such as pawnbrokers and check-cashing outlets.
The software used to process the FDIC and NCUA data is called Statistical Product for Social Scientist software, which Kidwell said is widely used by market researchers.