John San Filippo
CULytics 2020 Summit: Leveraging Data in the COVID-19 Era
On the opening day of the CULytics 2020 Summit, a virtual event, Christopher Danvers,
Vice President of Digital Strategy and Payments at American Airlines Credit Union, delivered a keynote presentation on how his credit union is using data to address the COVID-19 pandemic. Danvers has worked with credit unions with a focus on payments, digital transformation, and financial technology for over 15 years.
According to Danvers, American Airlines CU took all the now-common measures in the face of the pandemic, such as transitioning employees to work from home and offering members various forms of economic relief. Then there was a transition period as the credit union considered the long-term impact of the situation, “really taking time to think about the original business plan,” he said. “Is that original business plan going to continue to be relevant for the rest of the year on the backdrop of COVID-19? Which strategic initiatives and projects that were in the pipeline or perhaps on the road map should be paused? Which of them should be re-evaluated and which of them still made sense, versus which of those initiatives seemed a little tone deaf or perhaps irrelevant?”
He said that despite the myriad issues created by the pandemic, there was still a silver lining. “We were able to use the data from the past months to better understand how members’ behaviors had changed and how team members had been impacted,” said Danvers. Using data, he said, the credit union was able to look at whether or not the digital member experience had been sufficient and where any gaps might exist.
“In the months of March and April, we definitely saw a decline in debit card activity of around 14% less than what the plan called for,” said Danvers. “However, in the months of May, June into July, we definitely saw those transactions return and are at a point now where they’re actually above plan, signaling that as consumers are adapting to this new environment, they are shying away from some transaction models and moving to other transaction types that are preferred in this case.”
Danvers added that while debit card transactions are on the rise, credit card transactions have fallen off. “By April, we saw a declining trend in credit card transactions – around the 30 or 40% range short of plan as a result of members and consumers shifting from discretionary spends.” He attributed this to both members tightening their belts and the fact that many businesses where members might make discretionary spends were closed. He said that credit card transactions are slowly rising again, but are well below plan.
“Like the rest of the industry, we experienced a tremendous increase in traffic across our digital channels,” said Danvers. “To give some context, prior to the pandemic, we averaged about 3.5 million logins a month across all digital channels. At the peak of the economic impact payment program, we were in excess of 4.5 million logins a month. Members were trying to figure out okay, I'm expecting a payment from the government. Did I get paid? We’re seeing it drop off some now.”
How members are choosing to do business and transact has a material impact on business on the back end, according to Danvers. “So perhaps those playbooks around how members use credit cards and debit cards and other transactional means – some of the rules that we've always managed the business by – perhaps they need to be put aside and re-evaluated using the data coming out of the pandemic event to figure out how we create new, clean playbooks to manage our business on the go,” he said.
The challenge, according to Danvers, is identifying which of those trends are going to be permanent and which will be temporary as members adjust to the new normal. For example, prior to the pandemic, about 35% of all check deposits at American Airlines CU came in via mobile deposit. During the pandemic, that number has jumped to 55%. Will remote deposit usage remain high as more members become comfortable with it? Probably so.
The key, said Danvers, is using data to realign the project roadmap to determine which initiatives are strategically important and which may have diminished in importance. “Most importantly,” he said, “is figuring out how to keep operations running smoothly with high levels of efficiency and high levels of reliability, all while you have some employees working remotely for the very first time – working in the environments that they're living in with all those other personal challenges and stresses occurring at the same time.”