CFO Focus: Big data for credit unions

Leveraging member analytics for competitive advantage is a new and important role for a CU’s top finance person.

by: Bill Goedken, CPA, CMA, CGMA

The idea that large amounts of data can be leveraged to better target and serve certain markets is not one that’s lost on non-traditional financial services competitors.

For example, did you know that Facebook has a financial institution division? With everyone “liking” everything from soap to music, just think of the information the social media giant has to potentially market financial services to specific population subsets. Facebook “knows” that 3 million couples in the United States are engaged to be married. These couples make a great target for financial offers, since major life financial decisions (joint checking, investments, home ownership, autos, etc.) are about to take place.

Likewise, Canadian Tire Bank, something like a Walmart bank in Canada, “knows” that people who buy Mobil 1 oil (a premium motor oil for cars) are much better credit risks than people who buy generic oil for their cars. Why? Because there is a correlation that people who buy premium motor oil and “care” about their cars also “care” about their credit.

It is true big data can mean many things. In a nutshell, big data can be anything that relates various trends and patterns to human behavior. For a financial institution, big data is about discovering patterns and how they relate to your operations. Examples include: ATM transactions and patterns by age group; website statistics, fraud detection; even population, household income, and other demographic shifts in your market over time.

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