White Clay Helps Credit Unions Mold Data into Better Member Relationships

By Roy Urrico

“How are you going to be a relationship bank or credit union if you can't even see your relationships?” Scott Earwood, head of the community banking division at Louisville, Ky. fintech White Clay, asked in a conversation with Finopotamus. Earwood went on to explain how White Clay helps banks and credit unions analyze data in their systems to define, understand, and strengthen accountholder relationships.

 Scott Earwood, head of the community banking division at Louisville, Ky. fintech White Clay,

While the banking environment and business models are evolving quickly to stay competitive, financial institutions should move from a transactional to relationship-based model, said Earwood. He described how White Clay offers credit unions and banks a comprehensive view of accountholder interactions and insights to improve daily business decisions. This involves having a holistic view of accountholder relationships through available data.

“We have a standardized product that we offer. We incorporate all their data, add some intelligence, and then we deliver that in a dashboard for the reps and the management to see all this information. They have a better idea of what their members are using, what their members are not using, where there might be opportunities, where we have transacting members,” said Earwood. The data could also reveal if the credit union is the main financial institution for that member.

Reaching into the Community Bank and CU Space

White Clay, in business since 2006, has expanded its reach into the community bank and credit union spaces in the last half dozen years or so. “We tend to do better with the credit unions who are building and growing,” said Earwood as opposed to more established banks.

According to Earwood, White Clay discovered that some credit unions find profitability counterintuitive to their business model. “They want to take special care of their members and that is awesome. But they do not really want to discuss the revenue that comes along with that. This is not a right or wrong answer. It is just about a fit,” said Earwood.

“But there are more credit unions now – that are even buying banks and getting more into commercial (banking) – doing things that (operate) a little bit more traditionally like what banks have done, more than what credit unions have done. And we find that we do pretty well in that arena,” noted Earwood.

Using Data to Find the Relationship

Earwood suggested gaining a complete view of each member’s relationship allows credit unions to fully understand their unique financial needs and build stronger connections. This, he added, is how credit unions become more relational and less transactional.

After White Clay gathers client data, Earwood said “We can see what is there and see what is not there. That will then allow us to start to advise (credit unions) on where we see opportunities.” He continued, “Instead of following a spreadsheet that gets sent around, we can track all that on a dashboard. All the reps see how they are trending, how their branch is doing.” Although it is the financial institution’s information, White Clay can enhance the data derived from a data warehouse or business intelligence platforms such as Power BI or Tableau or any of the other analytical systems.

For instance, White Clay can provide insight about the use of debit cards. “They've got to get debit cards in more of their members' hands, which is a good thing to do. You can make some interchange money, it makes (the credit union) stickier. Lots of good things happen if they are using your debit card,” said Earwood.

White Clay worked with Flint, Mich.-based Financial Plus Credit Union ($1.5 billion, 81,260 members) to boost debit card usage. “Their issue was not to get debit cards in people's hands. Their issue was to figure out how to get more members transacting with them rather than just being a member who does all their transactions at another institution,” Earwood said.

Finding a Sweet Spot with Credit Unions

Earwood said White Clay seems to thrive in the community banking space, particularly financial institutions under $10 billion. “Our sweet spot in the credit union space is that $1 billion plus range.” Smaller than that “we probably do not have as much economies of scale to get a good return.”

Earwood indicated how White Clay builds out and track incentives on the retail or commercial side. He advised that White Clay can also help in the strategic planning with credit unions eager to offer more treasury management and cash management services. “We are really strong ln the credit union space that is really diving into the commercial world.”

Earwood said, “It's really about a partnership, about starting to change some habits and some culture a little bit; to be a little more data driven.” White Clay, he made clear, does not make any decisions for the financial institution. “We just want to bring more data into the equation. Make it a little smarter about who they are reaching out to.”

He cited a scenario as an example. “Suppose you have someone who has a high-end money market, a loan, but they do not transact with you. How do we start to develop a list of those people for branch reps to sell? We do not like to use the term next logical product, but how do we give good points of conversation to the reps so that when they meet with a member, they have better data?”

White Clay, he added, wants to gather all that data together and find those opportunities. “Work with the credit union on what are they trying to do, and then what is the data telling us would help. That is really where the magic starts to happen. We want partners that want to actually use the data to make smarter decisions and to make smarter reach outs.”

Gaining Primary Status

“The number one correlating factor to profitability and longevity at a bank or a credit union is whether you have their primary transacting relationship,” Earwood stated. “And if you do, then you are sitting on even more data because then you know where they are spending their money, (and) how they are spending their money. Are they paying loans at other institutions that you could possibly cross sell? There is all this great information that you could have at your fingertips.”

As an advisor, White Clays’ goal is to help financial institutions recognize and improve their accountholder’s relationship. “We just have access to a tiny little world inside their system to do what we do. But then we rehash all the data every week, redo all the balances, redo all the profitability, see what is open, what is closed, what new accounts there are, what new products there are, all that stuff. And we make sure that data then stays clean and curated on an ongoing basis.”

Presently, Earwood said that there are a number of credit unions in talks with White Clay. “I would say we are still learning plenty about the credit union space,” he noted. “We're just trying to make sure that there is a value for the credit union and a value for the member. And we think there's a lot of ways to improve that on both sides of that equation."