Want to Be a Data-Driven Credit Union? Start With Your Culture.

Everywhere you look, you’re encouraged to follow the data, rely on the data, listen to the data.

We get it. Data is an incredibly valuable and powerful tool. It can make a huge difference in your credit union’s ability to attract new members, serve members, and increase operational efficiency. Credit unions certainly have access to plenty of data. But simply having data and investing in the tools to analyze it isn’t enough.

A recent case study from our friends at Filene Research Institute reported that even though 92% of surveyed Fortune 1000 companies increased investment in data analytics capabilities over the last decade, only 29% of them experienced transformational business outcomes as a result.

Why do so many organizations struggle to use data effectively? As Keith Sultemeier, CEO of Kinecta Federal Credit Union, points out in the Filene case study:

“You will not derive value from data until you successfully marry technology with strategy, invest in people and culture, and connect your business intelligence infrastructures with organizational process.”

It makes sense. Data is important—but only if it becomes essential to every person and process at your credit union.

Most credit union marketers have at least one success story about leveraging data to improve a process or service. In a recent Community Roundtable, which we hold quarterly with our clients, we discussed what it takes to build a culture of analytics. Here are some of the positive ways that data has helped inform decisions and strategies for our clients:

• Increasing the percentage of loans funded. When the marketing team at one credit union realized that a sizable percentage of members were being approved but not funded for debt consolidation loans, they dug into the data to learn more. They discovered that applicants were dropping out of the process when told they had to close their credit cards to get the loan. Marketing was able to convince the loan department to reconsider that requirement and has since seen a boost in funded loans.
• Tracking the impact of branch closures. Another credit union used data to help them understand what happened to members whose branches had permanently closed (due to the impact of Covid). Thanks to the data, they knew which members had moved to other branches—and where—and which had moved to digital-only banking.
• Measuring digital ROI. At one credit union, the lending department sends the marketing team critical stats about that month’s online loan applications, providing them with a meaningful metric to help track the effectiveness of their digital campaigns and tools.

The common thread throughout these stories was that data collection, analysis, and follow-up actions were a cross-team effort. On the flip side, nearly all the common problem areas cited by our clients related to the challenges of cross-team communication and collaboration. For instance:

• Employees who don’t understand how data relates to their jobs
• Lack of C-suite buy-in, or conversely, C-suite buy-in that hasn’t trickled down to front line staff
• Siloes between key stakeholders
• Inability to access the necessary data points
• Desire to prioritize data without a coordinated effort to reprioritize other job responsibilities

These successes and problem areas demonstrate that shared buy-in leads to success. A data strategy alone, which is where most credit unions start, will not inevitably create this buy-in. While a strategy is important and valuable, it’s only going to be successful if your credit union has the right cultural foundation.

Why is culture so important? If you’re a fish, culture is the water you swim in—and it’s critical to your survival. But sometimes we’re so used to swimming in it, we forget it’s even there.

But when we are intentional about culture, great things happen. One of the most well-known management thinkers of the 20^th century, Peter Drucker, famously said, “Culture eats strategy for breakfast.” And to paraphrase another great thinker, Patrick Lencioni, organizations that have a strong culture naturally improve their strategies, but the opposite isn’t true: Strong strategies don’t naturally lead to a stronger culture.

A recent Filene survey of over 100 credit unions found that when it came to predicting value creation, the culture around analytics was twice as critical as architecture and three times as important as leadership.

So, what can you do to build a data-driven culture?

 

1. Find your champions

Filene found that although leadership alone was insufficient when it came to creating actual value from a credit union’s analytics, it was the most important factor when it came to determining a credit union’s readiness to create value.

Clearly, it’s important to find at least one champion at the C-suite level. But don’t neglect other teams — can you find frontline champions at branches and call centers? Amongst your loan officers? It’s critical that your credit union understands that analytics and data can benefit decision-making across teams and shouldn’t be siloed in marketing or IT alone.

When it comes to rallying champions, anything that shows a bottom-line benefit is a good place to start. Given the range of revenue-related items that can be improved when data is used effectively—such as marketing, loan growth, expenses—it typically isn’t too difficult to find insights of this type to share.

But bottom line benefits alone may not be enough. Kinecta found they needed to re-examine a host of areas that were improved with more effective data management, such as rules around fraud, and how analytics could shape decisions around asset liability and credit risk. Those changes all needed cross-team buy-in to be successful.

 

2. Create data literacy throughout your entire credit union

Remember our analogy—this is the “water” every member of your staff needs to be immersed in. Yes, you’ll benefit from having a data-savvy leadership team or a great IT department, but it’s not enough—every member of your team has to be part of this. And, although working with and leveraging good external partners can be part of your strategy, you can’t outsource your culture. 

Analytics should be an important component of onboarding and an important component of ongoing employee education. This doesn’t mean you expect every employee to become an analytics expert—but they should become fluent at a basic level of analytics capability. They should become accustomed to asking, “What does the data say?” in the face of pretty much every challenge. Will you have an answer? Sometimes you won’t. But asking the question is an important place to start.

 

3. Show the importance of data through your actions, not just your words.

What is your credit union doing to prove that data matters? Are you “putting your money where your mouth is” by allocating dollars and time? Are you actively working to build your analytics skills? Are you prioritizing data in your interactions with staff and members?

If collecting and analyzing data becomes just one more task layered on top of existing job responsibilities, employees are going to be less likely to prioritize it and more likely to see it as a chore imposed on them from “above.” It’s essential to reprioritize other job responsibilities, consistently reinforce the WHY, and empower all employees to share their data-driven success stories with the rest of the team.

You may already have an analytics strategy, but what is the water you’re swimming in? At PixelSpoke, we have three high-level goals in our strategic plan related to analytics, but we’ve learned the hard way that setting strategic goals isn’t the same thing as building the support and infrastructure needed to create a true culture of analytics.

People can intellectually agree that an analytics strategy is “right” without giving it the support it needs to succeed or without understanding how they need to change to make analytics a core organizational competency.

Some team members at your credit union might feel that they’re drowning in data while others remain far removed from it — still on dry land. To create a true culture of analytics, everyone at your credit union needs to be both empowered and motivated to swim.

Co-author: Kerala Taylor

This article originally appeared on CUInsight.