Using analytics to navigate the rising rate environment

As we drive our daily routes, we tend to trust our memory and navigate purely on instinct and muscle memory. When a storm hits, however, tried and true routes are not as reliable as usual, since we cannot fully understand the impact a storm will have on a familiar path. Most of us rely on a navigation system (i.e., Google Maps) as we make plans to travel. Whether it is across town or across the world, we depend on accurate data to navigate to our desired destination. Without even realizing it, we literally become “Data Driven” by following the navigation system.

As we enter spring, our travel might be disrupted by human factors such as road construction. Similarly, the Federal Reserve is disrupting traffic throughout the economic highways of the country. The Fed continues to increase interest rates at speeds not seen in a generation. With over a decade of near 0% interest rates, credit unions are facing a new economic climate that many of their employees have not experienced before.

As interest rates quickly climb, a dramatic shift has occurred. While mortgages are drying up, members continue to borrow at a rapid pace, causing a liquidity crunch. These are just a couple of factors credit unions need to consider when navigating their credit union through this economic weather.

What does your credit union need to navigate rising rates?

Understanding how to navigate through a change in weather requires state-of-the-art, well-maintained tools/equipment. From satellites and weather instruments collecting data, all the way to the Google Maps app on your phone, data is being collected, updated in real-time and presented to the user with a simple display. Predictive analytics (including artificial intelligence and machine learning) enrich the data to predict traffic, weather and many other factors to recommend the best possible route.

 

continue reading »