Data pooling: Leveraging your neighbor’s data

The trend of data-driven decision making is exploding within the credit union space.  Pressures to increase revenue, reduce risky assets, and efficiently identify qualified sales leads have all contributed to the growing trend.  But as the push for data-driven decision making has gained popularity, the need for a wider breadth of data has become apparent.

For most decision making, credit unions need only leverage the data within their own walls. However, some types of decisions require a larger volume of data. Data like credit risk forecasts require immense amounts of underlying data to be accurate. Most credit unions by themselves do not have the critical mass of necessary data for such forecasting.  However, in the collaborative spirit of the industry, credit unions can join forces to amass an adequate amount of data through the process of data pooling.

What is Data Pooling?

The process of data pooling involves multiple credit unions securely transmitting their data to a data pool provider. The data is compiled into a single data set where algorithms created by the data pool provider generate analytic results.  The results are then sent back to the originating credit unions for their personal use.  A credit union will only receive data back related to the data they originally sent.

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