Many banks and credit unions have set their sights upon initiatives that would allow their teams to make informed, data-driven decisions to improve their business. But when it comes to delivering data-driven insights, timing is everything. Currently, too many mid-sized credit unions and banks rely upon reporting modules from their banking cores for trying to understand business performance and making business decisions. The problem with doing this is two-fold.
First, core reporting only shows you what happened in the past. It does not give you predictive insights for acting now or in the future. As we know, market conditions can rapidly change. Looking back on what worked for your institution three months ago may be informative on past performance, but it is of limited value in deciding what to do next. Your analysis is limited to a review of the past, and then guesswork for what to do today. This is a business review, not data analytics.
Second, by the time that most financial institutions get their core reports, it is months later. This means that if you are basing decision-making on analysis of the core reports, you are making decisions based upon stale data. As we know, market conditions can rapidly change. For example, if you are looking back 3-6 months, you may likely see strong mortgage lending performance. But as we know, with climbing interest rates and inflation, mortgages are not the hot product that they were six months ago. If you decided to double-down on marketing and sales campaigns for achieving new mortgage loans, you would not have the return on this investment that you might have had six months ago. The core report data is stale and does not reflect the market changes.
Timing is Crucial
For this reason, it is critical that your team be enabled to act based upon fresh data. This allows your team to be nimble and pivot strategy as the market changes. The change in the mortgage lending business is an obvious one, given changes by the Fed in interest rates. But what about subtle changes in the market? What about changes for each of your members or customers individually in their life circumstances and behaviors? Having information on what was relevant to a customer three months ago does little to help you act today.
For example, when a member changes jobs you have a window of opportunity to market an IRA product before the member likely settles into a new 401(k). If you market the IRA to the member three months later, she likely has rolled over into the new 401(k) and you missed your opportunity. Yet if you had a data analytics solution that provided daily insights, such as a change in the income stream pattern by amount or timing of payroll deposits, this could alert you to a change in employment status as it is happening. This gives your team the ability to sell an investment product when the opportunity is ripe.
Delivering Fresh Data-Driven Insights
Only predictive data analytics can deliver daily insights at scale for all of your customers or members. By detecting trends and patterns revealing growth drivers through predictive analytics, your team can be nimble and positioned for informed decision-making. This leads to doing more of what is working and less of what is not effective in growing operating income and customer loyalty.
