In the finance industry, we’re all feeling a collective case of whiplash as we start to consider budget planning and spend for the coming year. It’s been awhile since the industry has been on such a roller coaster, and we have a feeling it’s not over yet.
Because of the ever-changing economy, credit unions are facing the challenge of uncertainty on many fronts, including home and personal loans (which were up in 2021 and down today) and credit cards. Usage of credit is up at a time when expectations are that members should be paying down that debt, instead of relying on credit to get them through from paycheck to paycheck.
Another specter is that of ‘buy now, pay later’ (BNPL), which lures consumers in with the opportunity to pay over time, as with a conventional credit card, but without having to qualify to do so. This is leading consumers down a path of overspending which, in turn, is resulting in people making late payments. Despite that, BNPL users are becoming loyal to that service, eroding loyalty to their credit union in the process.
How can credit unions best serve their members in this present economy? The key is to harness and activate data.
Relying on data as the foundation of a financial institution’s (FI) ecosystem is no longer optional. It’s a must. Credit unions have a wealth of insights within their member data, but must improve how that data is put into action.
Right now, a CU’s path forward is to focus on leveraging data insights to intelligently build strategies that combat the challenges FIs are dealing with today which also positively impacts acquisition, share of wallet, loyalty, and growth. Data is the great equalizer that delivers the only true holistic view of each member’s financial journey.
Execute a Data-Driven Strategy
Financial institutions have to make a commitment to being a data-driven organization, with adoption across every department in the organization. It has been said that data is the oil of the 21st century. And with 2.5 quintillion bytes of data created each day and the pace accelerating, financial institutions have to get on board and fast.
Insights derived from account holder transaction data can provide:
- Intelligence around product utilization, held-away accounts, merchant spend, and engagement with other services.
- An understanding of “vital signs” that are the pulse of the account holder.
- The power to create marketing campaigns across multiple channels that deliver relevant messaging at the right time to the right audience.
A financial institution’s commitment to setting data into action and being able to pivot with on-demand intelligence and ongoing data insights will ultimately determine their fate in an aggressive and disruptive marketplace.
Utilize Predictive AI Modeling
In this rapidly changing economy, it is important to identify your account holders’ wants and needs before they initiate outreach to you on their own. Everyday purchase behaviors are extremely predictive of a member’s financial priorities and predictive modeling is an imperative tool that can empower your FI to be future-ready in this highly competitive industry. When you know what your members need, you can more easily craft messaging to deliver the right message at the right time.
Integrate Data with Email Channel Delivery
Many credit unions struggle to leverage their member data for email use to accelerate revenue generation for both current account holders and acquisition campaigns. Adopting a data-leading approach to email means combining insights with email automation to deliver the highest level of targeting efficiency and relevant engagements. Email’s impact as a significant channel used by marketers will continue to rise, with the future of email marketing being fully intertwined with artificial intelligence and machine learning using high-quality specific data. FIs can get the most out of their email platform when it can align their marketing efforts with a full suite of media channels, while also utilizing their own account holder transaction data, combined with the opportunity to measure success through end-to-end attribution reporting.
Leverage Marketing Technology (Martech)
It’s impossible to survive in today’s market without it. Marketing technology (Martech) is a set of software solutions used by marketing leaders to support mission-critical business objectives and drive innovation within their organizations. Understanding member behavior within your institution and with your competition requires tools that can combine all sources of data into one platform. Driving analytics, engagement, attribution, reporting — these have to sit alongside the traditional technology stack and work as one to provide a full view of an institution’s ecosystem.
For more strategies for financial institutions, download our eBook, “Navigating the Economic Impact: Strategies for Financial Institutions in 2023.”
Putting these strategies into practice opens the door for FIs to focus on limiting churn, make strategic decisions around product innovation, and maintain strong account holder relationships that match consumer expectations.
At Segmint, we help financial institutions of all sizes cleanse, contextualize, and activate their data with Merchant Payment Cleansing, Customer Insights, Marketing Automation, and Predictive AI Modeling. Powered by data scientists and artificial intelligence, our innovative product line offers a variety of ways to optimally use your data to deepen your relationships and grow your business.
Ready to learn more? Contact us today.