BOCA RATON, Fla.-Better analytics are helping a number of credit unions to drive better revenue from their card portfolios.
At American Airlines FCU, for instance, it has been putting significant effort into boosting checking penetration. And that includes actively addressing situations where accounts may be about to leave. To monitor those scenarios, according to VP-Payments Nancy Crouch, it looks for indicators a member is heading elsewhere. "It's hard to tell when you are about to lose checking or have already done so," said Crouch. "But one way to do it that is to identify accounts that were active and have now gone dark. It's bigger than just what you can do from a card perspective. That checking account is the core relationship; that's what gets you loans."
Crouch's comments, which came during CO-OP Financial Services' THINK 12 Conference here, were echoed by Stephen Tabier of San Mateo Credit Union in California. "The importance of being able to look at the data from a marketing point of view can't be measured," said Tabier, who spent three years with Visa. "Being able to do segmenation, mailing and analysis myself is critical."
CO-OP said the Revelation solution, which added a number of enhancements in late 2011, improves debit, credit and ATM portfolio profitability by revealing opportuntieis within transaction and terminal data.The solution offers 13 different reports, in addition to seven ATM Acquirer Reports. Credit unions can also set thresholds and customize data according to functional groups within the card base.
Questions To Ask
With the ATM Data, Crouch said AAFCU, which runs 99 ATMs, now uses terminal-level analytics to probe for the effectiveness of placement, machine profitability, member vs. non-member usage, and more.
Rachel Swank of Saylent Technology, which powers the Revelation solution, asked credit unions about how well they know the state of their current debit programs.
"Do you know how you compare to your peers? Do you know what percentage of new debit cardholders activate their cards wthin the first month? If you do, you can see where you might have a training opportunity," said Swank. "That can help you build the right onboarding process. If you know the average time to activate is six days, you don't want to start bombarding the member with activation messages at three days."
Swank said CUs should also be able to determine usage trends by transaction accounts, be able to cluster by number of transactions, and more. "Do you know your card usage trends by transaction accounts? Can you cluster by number of transactions? It can really be important to you from a portfolio growth perspective," he said.
Shopping Info Can Be Critical
One piece of information such analysis can reveal is where members shop. "Why would you care about that," asked Crouch. "If you want to do a marketing campaign, you need to know where they are using cards in order to modify their behavior. And around that you need to know your interchange analytics. This allows you to speak to your members more directly."
San Mateo's Tabier said that information is what is better known as "offer relevancy. You can give members a dining certificate, for instance, if that's relevant to their current behavior, to get them to use your card at a gas station more often."
Saylent's Swank said that when it comes to card activation and utilization the core issue is "communication, communication, communication. It's important for your front line to understand how debit cards work, that they are more than just a device for accessing ATMs."
Texas-based AAFCU has an 86% card activation rate vs. the national average of 66%. "We have a plan and we have executed it," said Crouch. "If you don't know your activation rate, you are leaving money on the table. Some of the greatest returns on debit card marketing are from people who are doing one-to-five transactions per month. Targeting that member segment can be very, very profitable and we've had a lot of success there."
