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Paula Tompkins

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Credit Union Executives Must Mine Existing Members for New Product and Service Adoption Digitally?

Credit union executives realize that individualized messaging is key to reach increasingly distracted members. As the tools and data available to credit unions continue to grow, so does the pressure to turn the data into measurable results. Improve your speed-to-market, using data mining to develop insights that drive sales, profits, and member experience.

Deploying a digital transformation strategy is less complicated than most think.


Return on Investment            Percent of Budget on Digital Initiatives            Time to Market  




1. The return on digital investment


The measuring of the return on digital investment is essential in understanding the group's digital initiatives' value to generate increased revenue. The pandemic revealed there is no such thing as standing still and waiting for tomorrow to execute; making little or no investment relative to the competition is to fall behind. Thus, digital transformation and investment are about survival and competitiveness.


To see the quickest results on the investment, we recommend a walk, run, ballet approach. Start by mining existing members' data to leverage similar data sets, trends, and behaviors. Understanding members' past and present data for adoption provides insight into member acquisition, cross-selling, and retention, helping you predict new services and product priorities and upcoming life events. Having a bold approach to a complete member personalization strategy using data mining to drive products, services and content, yields efficiency gains, leads and broader revenue results.



2. Percentage of annual technology budget spent on bold digital initiatives


Credit unions that spend only a tiny portion of their annual technology budget on enabling a more personalized member experience are unlikely to maximize the return on digital investment. Allocation on digital transformation technology is a leading indicator that credit union executives should be monitoring to ensure that the organization positions itself to deliver digital-backed value to its members.


Credit unions are working to shift away from a monolithic IT architecture towards partner microservice solutions, best-of-breed tools for digital needs and custom quick-to-market microsites, and application tools. These tools allow organizations to rapidly create new digital experiences that benefit members with content that provides the financial information, services, and products they need throughout their financial journey in reaching goals.


However, many credit unions are still caught up in overly complicated IT technology that consumes massive resources. A 2021 McKinsey research report suggests that many financial institutions spend as much as 92 percent of their digital budgets on infrastructure and maintenance, leaving a small 8 percent for digital transformation initiatives that drive growth. Don't discount the efficiency gains to improve investment return by identifying technology areas where greater targeting and leads grow and retain member's share of wallet.



3. Measure time required to build a digital personal experience


Speed-to-market, specifically the quick translation, that curates existing content and current data into your members' working digital experience. In the fast and ever-changing financial world, the delay means yielding an advantage to the competition. Despite discussion that has been going on for the past five years and accelerated by the COVID crisis, many credit unions have little idea of how they truly measure up in this area.


                                     Traditional                  Leading                       World-Class                Why It Matters


Time to Market           1–2 years                      2–6 months                 8–12 weeks              To compete for members on the basis 

                                                                                                                                                  of new tech functionality and data insights


Release Frequency     1–4 per year                1–4 per month            10–50 per day          To test and refine the member experience



Our experience in delivering personalized digital experiences suggests timelines for getting credit unions to market and for new releases should take less than three months.  With agile, cross-functional teams working in two-week sprints, a credit union can make a series of quick to market improvements, to optimize the member relationship for financial products that increase revenue and loyalty. Rapid does not mean poorly functioning. While always subject to continuous improvement, products must still provide an adequate member experience from the start. Once the product is in the members' hands, deploying refinements should be timely based on data and take no more than the agile process.


It is important to note that we advise measuring cycle time to market, not cycle time to proof of concept. Executives need to understand the difference. Credit unions build centers of excellence in many cases that produce numerous models and analytical reports, but most never scale or see widespread use. Deployment speed is arguably the most important key performance metric indicator (KPI) in digital and analytics. It proves the degree to which all elements of an organization are working together. How quickly data and data modeling insights reach the field to test, learn and improve, is the speed-to-market measure.


Finally, since credit unions can never hire for all the digital talent needed, it's essential to measure how well your organization finds partners that are on the cutting edge of delivering data, insights, and the digital experience.

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