ROHNERT PARK, CA (November 2, 2015) — Credit unions allowing low risk tolerance and outdated underwriting models to dampen their lending success may soon find themselves out of the game all together – especially in the credit card space. This was one of several points made by Rahul Nawab, founder of data analytics firm IQR Consulting, at the recent Credit Union Big Data & Analytics Conference.
Nawab, a panelist in a session on personalized marketing, shared specific insight on the power of data to transform credit card line increase campaigns. Having worked with 10 credit union issuers over the past year to optimize line management strategies, he provided several real-world examples in which credit unions generated incremental balance increases as high as 15 percent.
One such issuer was a $3 billion credit union looking for ways to grow outstanding balances without a high marketing expense. Credit union leadership settled on a data-driven credit line increase campaign. What separated this campaign from more traditional ones was a four-step process. The process, built by IQR’s analysts, segmented the issuer’s cardholders based on their likelihood to react to different offers. The data-driven, highly targeted approach ensured the right offer went to the right cardholders at the right time, therefore increasing both the effectiveness and ROI of the campaign. Ultimately, the campaign created $7.7 million in incremental spend, as well as $3.4 million incremental balances in the span of 10 months.
“A cardholder’s balance almost always correlates to his credit limit,” said Nawab. “Whereas a credit union may offer a member a credit line increase if he makes a special request, there is often no strategy for proactively managing line increases in bulk or by member segments. Doing so is one of the most effective and efficient ways to boost card program revenue – not to mention secure top-of-wallet positioning.”
To learn more about credit line increases, credit union staff may attend an upcoming webinar. The one-hour event will take place on Monday, Nov. 9, at 2 p.m. eastern. Online registration is open and can be accessed here.
IQR Consulting is a leader in portfolio and financial analytics, reporting, statistical modeling and campaign management. The analysts at IQR are experts in the use of segmentation as a means for highly targeted marketing. With accurate and actionable insights and analysis, IQR helps banks, credit unions and casinos leverage data assets to increase profitability and to better compete against larger institutions. For more information, visit www.iqrdataanalytics.com.
Kelly Moore (for IQR)
515-720-9670
kelly@kellymooreconsulting.com
