• Mon. May 20th, 2024

Case study: How a credit union leveraged data analytics to improve member service

Bynewsmagzines

Apr 13, 2023
Case study: How a credit union leveraged data analytics to improve member service

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This article is part of a VB special issue. Read the full series here: Data centers in 2023: How to do more with less.

The world of financial services is hurtling toward digital transformation at an unprecedented speed, and industry insiders are understandably concerned. In fact, 81% of banking CEOs expressed concern about the speed of technological change.

With big banks, community banks, and emerging fintechs all vying for a piece of the pie, credit unions must adapt to meet the needs of their members.

However, credit unions face unique challenges in this digital transformation. Many are struggling to keep up with their larger counterparts, with limited budgets for investing in new digital channels. In today’s competitive environment, advancing digital transformation isn’t just a good idea — it’s essential. Credit unions that fail to modernize risk becoming irrelevant and losing relationships and revenue. 

Delta Community Credit Union (DCCU) understands this: The largest credit union in Georgia, with an asset size of $9.1 billion, is meeting digital transformation head-on.

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Nailing the basics

DCCU first implemented a comprehensive full-service model that provides products and services and seamless communication and interaction channels for its members, whether they bank in person or online. The credit union is helping businesses create a self-service model that allows members to access their accounts, view transactions and perform several other functions through an online portal or mobile application. This self-service model has been instrumental in reducing the operational workload and increasing member satisfaction.

Sujatha (Su) Rayburn, VP at DCCU, explained that the institution had begun transitioning to self-service models for members before the pandemic. Investment in online and mobile banking applications and systems enabled them to continue providing services to members when in-person transactions became challenging.

In the wake of the COVID-19 pandemic, DCCU tapped into data analytics, allowing a comprehensive view of members’ preferences and needs. By understanding what members value and require, the credit union has been able to offer the right products and services to maximize its value proposition.

The power of data analytics

Rayburn explained that DCCU has automated processes and reduced operational inefficiencies. The credit union uses data streams to match and resolve exceptions, reducing manual efforts and increasing efficiency. This focus on automation has not only helped DCCU reduce costs but eliminate the need for additional headcount.

Rayburn explained that the credit union understands that automation is a chain that spans from the front office — which is the member experience — to the back office where processes are streamlined to make the overall experience more efficient. 

Unlike many of its peers who have closed their doors or limited access to their branches, DCCU has kept its doors open while also allowing members to use apps for specific transactions. This has made it easier for members to manage their finances during the pandemic and has contributed to better member experiences, said Rayburn.

The need for a data strategy

Although DCCU weathered the storm, Rayburn wanted to ensure that it was planning for the future, especially with the rise of AI and machine learning (ML).

“I realized that while DCCU was performing well, there was room for improvement in terms of thinking more expansively about what these technological advancements mean for the business and how they will impact it,” she said. 

To develop the data strategy, Rayburn conducted assessments of the institution’s data maturity and worked with partners to understand the current state of the business. She looked at the top 10 credit unions in the marketplace and surveyed them to get a better understanding of the industry. She then looked at their business strategy and identified what differentiated it from other credit unions.

She realized that there was a significant gap in terms of developing member relationships in a holistic way. In her words, “Delta Community was doing things like building models to identify fraud and next-best-offers, but these efforts were not cohesive or well-thought-out.”

To address these gaps, Rayburn developed a member-centric data analytics strategy. Delta Community is in the process of creating a strategic analytics center of excellence that will focus on building member centricity to bring data from all its digital channels. This can help ensure that the data is oriented towards serving members supporting member service in a more robust way. 

“Delta Community wanted to meet members’ needs at the right time, at the right place and at the right level,” said Rayburn. “The strategic analytics center of excellence will help Delta Community focus on member needs and use analytics to support member service; it will also modernize our tech stack and help us scale and perform better.”

Data governance takes center stage

DCCU has been protecting its data for several years by tokenizing personally identifiable information (PII) data in its data warehouse, making it inaccessible to those without the need to see it in the clear. To take its data governance strategy to the next level, DCCU partnered with OvalEdge, a business glossary that helps organizations manage and classify data more efficiently. The software enables DCCU to tag and categorize data, show what rules were applied during data transformations, and help business users serve themselves.

One of the game-changers for DCCU has been the ability to use its employees to build upon the stewardship model, ensuring customers have visibility into reports and data elements. With OvalEdge, business users can now understand how data sources were built, where data is coming from and what rules were used to create metrics.

DCCU has started crowdsourcing to the stewards within the business, curating content within the OvalEdge platform. This approach has enabled employees to gather at a ‘water cooler’ and chat about anything related to data.

A “data as an asset” organization

DCCU is ultimately shifting to a “data as an asset organization.” In this, OvalEdge worked closely with DCCU to understand its drivers, priorities and goals, and assisted with developing a deployment plan that included term curation, training, lineage building and more. The company established a crawl plan to build lineage and configured the tool while designing a roadmap for a successful implementation.

OvalEdge has helped DCCU establish trust in its data via its data catalog and business glossary, operationalize meaningful data stewardship, enable report governance through micro/macro lineage tracing and automate data profiling.

As DCCU continues to mature, they plan to leverage OvalEdge’s data quality score-carding capabilities, enforce least privilege security for NPI/PII data across the enterprise, and conform to privacy regulation.

“DCCU’s data governance strategy rollout is still in its early stages, but OvalEdge has helped (us) establish the foundations necessary to scale its analytics operations and remain competitive in a rapidly changing market” said Rayburn. 

A recession on the horizon? 

Recession risks have been re-ignited by the recent banking collapses and rescue deals, and there are now concerns that global growth will weaken as the crisis heralds the end of the “easy-cash era” and the arrival of a credit crunch.

Rayburn explains that the institution performs a monthly asset liability management aimed at stress-testing their assets and deposit portfolios. It also has a conservative approach to managing finances, which includes a test-and-try approach.

“We don’t want to be the first to try something new and prefer to wait for others to test the waters before they take the plunge,” said Rayburn. “This way, when we do roll out something new, we do so in a complete and thorough manner to avoid any potential disruptions to our customers.”

Ultimately, having a smart data strategy is more and more important, especially as black swan events like the pandemic become more common, said Rayburn.

“The retail banking industry is at a critical juncture,” she said. “Having a smart data strategy will not only help DCCU weather any future economic storms, but will help improve performance and better address customer needs. A smart data strategy can also help us cultivate our brand and stand out in a crowded market.”

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