By W.B. King
Big data is transforming the world. Take, for example, a recent U.S. Chamber of Commerce statistic that found that 90% of all data was created over the last two years. And according to SMSEagle, in 2020 six billion text messages were sent each day in the U.S.
Credit unions are also generating vast amounts of transactional data, but it’s often siloed and not targeted to specific members needs.
“We have to use data in a way that is actionable, measurable and allows us to understand the needs of our members—it’s a one-to-one message that is relevant and timely,” said Becky Summers, leader of Marketing Solutions for Raddon Financial Group, a Fiserv Company, which provides innovative research, insightful analysis and strategic guidance to financial institutions.
“Data helps us tell a story that uses the facts,” she added.
Summers, serving as a moderator, made these opening remarks before introducing panel members at CUNA’s 2021 virtual Governmental Affairs Conference. Panelists for the “Success Stories in Unlocking Data for Growth and Engagement” session included, Randolph-Brooks Federal Credit Union’s Vice President of Marketing and Business Development, Blake Lyons; Altra Federal Credit Union’s Vice President of Marketing, Cheryl Dutton; Pacific Service Credit Union’s Assistant Vice President of Marketing and Communications, Mark Cardella; and Segmint, Inc.’s Co-Founder and Board Member, Rob Heiser.
“The relevancy of data is super important,” said Heiser. The Akron, Ohio –based fintech company cleanses, categorizes and contextualizes data to provide insights that improve the quality of member relationships. “Key lifestyle indicators (KLIs) really tell the story."
"There are only so many points in time in which a member will make a very large decision, in terms of changing what they are doing with their life—buying a house or a car or paying for college or looking for a personal loan,” Heiser continued. “It’s important having data really well-organized, understanding where the member is within their decision point in their life and having messages in the channel in which they are engaged.”
The $1.9 billion Onalaska, Wisc. -based Altra FCU began its transformative data journey 18 months ago, which resulted in the completion of its data warehouse, explained Dutton.
“We knew we had a wealth of data through that transactional information, but just didn’t know how to get to it. We wanted a deeper understanding of our members,” said Dutton. “We wanted to do predictive marketing and give them relevant offers like when looking for a mortgage or a home.”
Altra FCU serves more than 116,000 members and part of the goal of deciphering data was to change respective member behavior—whether via online or mobile banking or searching for products like remote capture, Dutton explained.
“How do we help them use those services more efficiently,” she posited. “We had tried to look at transactional data but ‘trans’ codes were really beyond our capabilities. So, we wanted to plug into a platform like Segmint that could bring that transitional data and segment our members into KYIs and do predictive and behavioral marketing that we always wanted to do.”
This initiative, she explained, include identifying and contacting members who were making mortgage payments to other financial institutions as well as those members visiting the credit union’s website looking at loan originator pages.
“We served them a very unique offer through online, mobile banking and website [channels] so they had a relevant message right away,” noted Dutton. “I’m so excited to report that we were able to measure what those offers did—approximately 2,000 of our members took advantage of that offer resulting in $198 million and an understanding of our ROI.”
Understanding In-between and Fringe Members
Similar to Altra FCU, the $1.3 billion Concord, Calif. –based Pacific Service Credit Union also took on a digital and data transformation over the last two years, explained Cardella.
“A lot of the time organizations think IT will manage the data and marketing will use the data and everyone else gets to watch us do it,” he said. “But we as an organization decided that it wasn’t an IT and marketing function, but that we were going to be data driven from the top down.”
When Cardella joined the credit union seven years ago, he said data was “out sold” monthly and the team “raced” to get campaigns in the mail and/or sent emails at the beginning of the month trying to get “fresh” data.
“Now if we are sending emails, direct mail or delivering campaigns the next day it feels like we are too slow," he said. "We are in the throes of warehousing our data and in the meantime have been able to use platforms like Segmint and Raddon to be as data driven as possible as we bring these disparate systems—all this data—into one space that we can use in real-time.”
While many of Pacific Service Credit Union’s roughly 65,000 members are digitally engaged, Cardella conceded that data collection is still a challenge opposed to those members who have "deepened" their wallet share with the credit union.
“The in-between members are the ones that we can’t quite seem to bring on," he noted. "We are trying to drag them in to knowing us. And then there are the in-direct members that sit on the fringe.”
Cardella explained that the credit union is trying to use actionable data to “dig in” and bring those members on the sidelines or the fence into the fold. “I think there are a lot of misconceptions and things people don’t understand about credit unions. Data gives the opportunity to bring things to the forefront for them.”
With the use of Segmint and KYI’s, Pacific Service Credit Union has experienced recent gains with regard to in-between and fringe members, said Cardella.
“We have delivered targeted ads through our website, online and mobile banking and just started delivering ads on the open internet. We are able to follow you, more or less, from website into online and mobile and out to the open internet and deliver ads in near real-time,” he said. “Based on your transactional history and behaviors, targeted ads will adjust and change based on where you are at, at the moment in your history. This has given us millions of additional impressions we didn’t previously have on the open internet or insights on online and mobile banking.”
Before this initiative, Cardella said a general advertisement, say for a Visa card, would be sent to all member channels. But now, advertisements are generated by user history. So, one member might see a credit card advertisement and another would see a home loan offer. These advertisements, he added, can change in real-time.
“We have seen lifts in applications, conversions and lifts across every metric we could possibly imagine,” said Cardella. “Our ROI is unbelievable.”
Reaching a Unique Audience
Prior to joining Randolph-Brooks FCU 14 years ago, Lyons was a marketing advertising executive and worked with healthcare, tourism and higher education organizations, among other clients. The major take away from these experiences was that every client was trying to reach a unique audience. The credit union industry, he said, is no different.
“It starts with really looking at what disparate data sources do we want to leverage and then get a whole picture of what is going on at the enterprise level,” said Lyons. “There are a lot of business units that own specific sets of data—mortgage lending platforms, consumer lending platforms and transactional data."
He continued. "If you’re able to get all that data together and standardize it in something like a data warehouse, then you can use tools like Segmint to extrapolate that data and have impactful conversations with your membership and show the value of the products and services.”
When undergoing a data transformation, Raddon’s Summers said that many credit unions uncover previously undetected data silos or ones that were otherwise hard to access. But after being tapped, these data sources often prove invaluable.
Lyons agreed with Summers explaining that while transactional data is critical to successful targeted campaigns, the data isn’t always effectively captured.
“I can recall early on when we would try and leverage that transactional data. You really had to know what you were looking for prior to requesting it, and that request might take some time to mine that data,” said Lyons. “This is because there are transactions that aren’t standardized. Sometimes it was like looking for a needle in a haystack.”
With the tools the $13 billion Live Oak, Texas -based Randolph-Brooks FCU has at its disposal today, Lyons said transactional data can be harvested in “semi” real-time. The credit union serves more than 938,000 members.
“We are able to look over time at trends and what those transactions means to our membership in the form of these KLIs, but then we are also able to see what happened yesterday,” said Lyons.
One example of a successful Randolph-Brooks FCU predictive analytics campaign happened in 2020 when the pandemic first gripped the world. Understanding that members were fearful about economic security, and aside from programs like “skip-a-pay,” the marketing department looked to help membership in other ways.
“A lot of people wanted to find ways to save money. We were able to test into a pilot program where we could pick on one of the ‘big boys,’ Chase,” he explained. “We were able to identify members based on the frequency and dollar amount and we deduced via predictive analytics they were making a credit card payment to Chase.”
Targeting a couple of thousand members with the slogan “You Can Chase Away High Interest Rates,” the credit union offered a zero dollar balance transfer and a low interest rate credit card to qualifying members. The campaign resulted in roughly165 new credit cards with a total limit set at $1.3 million.
“The message resonated at a time when people were looking for relief and a way to shore up funds in their household,” said Lyons. “Transactional information is one of the most powerful data sets we have.”