In the age of the Internet, there’s arguably no resource more valuable than user data. By harvesting and exploiting this data, credit unions can hone in on the members most likely to qualify for a loan or other financial product; and, they can create laser-target messaging based on member demographics, interests and account history.
Safeguarding Member Data
The prioritization of user data has already revolutionized many industries, and the financial sector is no exception. According to a recent Politico article, “The nation’s banks [and credit unions] are locked in a bitter fight with upstart technology companies over the control of their customers' financial data.”
But while user data can be a powerful tool for banks and credit unions, it’s not without its risks. By now most businesses are aware of the very public failings of Facebook, whose mishandling of user data has led to a new generation of rigorous privacy laws and regulations. Facebook’s fall from grace has left many credit unions understandably jittery about whether they should harvest member data.
It’s important to take a good, middle-of-the-road approach here, neither being haphazard nor overly cautious in the use of member data. For banks and credit unions, a good first step is brushing up on some of the rules and regulations that govern data harvesting and usage; educate yourself on the current rules and restrictions for using the member data you have on file. There are a number of places to begin, including:
How to Leverage Member Data
Once you take the time to understand what data you have, and how it can be properly used, you can use it to create personalized offers, grow application volumes, and improve your membership relationships.
The big picture is that, by using member data, you can create a truly personalized experience for everyone who walks through the door. Indeed, the golden rule of our data-driven age is that one-size-fits-all solutions no longer apply. Data enables credit unions to have a better sense of what their members are looking for, what pain points they’re dealing with, and how the credit union experience can best meet their needs.
One valuable way to use member data is to create a series of consumer personas, broad sketches of the kinds of members you’re working with. Maybe one persona represents the interests of your small business owners; another persona, working families who are just trying to save some money.
These personas can be useful for building personalized offers that help members feel seen; in other words, that you are addressing their needs directly, rather than speaking to them in generalizations.
In a recent survey conducted by BCG Retail Banking Advisory, 37% of bank customers said they wanted their banking experience to more closely resemble Amazon.com, e.g., “I know what I want, but am open to automated feedback or suggestions.” Another 29% said they wanted the bank to most closely resemble a “personal shopper” experience, e.g. “I know what I want but don’t know where to start.” Persona-based marketing can make these wishes a reality for credit union members.
For some examples, look no further than to Bank of America and its use of customer service chatbots. Or, to Simple Bank’s innovative app, which makes it incredibly easy for customers to manage their money without having to visit a physical branch.
Make sure to create personalized experiences at every stage of the member experience, from window shopping, to doing business with you, to trying to win back members who have moved to a different bank.
Using the Right Digital Lending Software
After reviewing regulations and other compliance issues, we recommend using loan origination software (LOS), developed specifically for credit unions, to automate your data collection efforts. To learn more about how MeridianLink can aid you in creating member-specific offers and messaging, we invite you to learn more about our products today.