Amidst Growing Competition, Credit Unions Turn To Data

When it comes to competing in the financial services industry, it helps to be in the know. For credit unions, that means having access to data-driven insights and actionable tools that could help them stay ahead of the curve.

Seaboard Federal Credit Union of Bucksport, Maine, is one such player, and it is using data insights to pinpoint financial products like auto loans and mortgages to better serve its customers.

In a recent interview, Kyle Casburn, Seaboard FCU’s CEO and president, told PYMNTS about how the CU is putting data tools to work and which other FinTech innovations could impact the credit unions’ operations.

A Data-Driven Road Map

The CU market faces intense competition, not only from traditional banks but also from newer FinTech players. In such a competitive landscape, access to such knowledge and data could be key to a financial institution’s success. But data is not always easily accessible, which can hinder a credit union’s ability to address its members’ needs.

“To get that data in a real-time environment is challenging,” Casburn admitted.

The challenge, he said, lies in the fact that it does not handle its credit card processing services in-house, he explained. Multiple parties and interfaces are involved — including mobile, credit card processing and banking vendors — making relevant data a bit elusive. 

To cut down on troubling data blindspots like these, Seaboard FCU has been turning to its core processing service provider. It helps the CU analyze and collect data to better serve its members, particularly by highlighting opportunities to reach out with offers on more affordable financial products, like mortgages, credit cards and debit cards.

Tapping Data, Targeting Members

One of the reasons Seaboard FCU has sought to invest in analytics and data insights is to more effectively pitch financial products to its members. Without these insights, the CU is forced to rely on launching wide-ranging campaigns. While these efforts could reach some members, they largely go ignored by others.

“Data analytics is driving us to get the right offer at the right time to the right member,” Casburn said. “The days of mass media and [the] blanket approach [are] long gone.”

The right data insights, he added, can help the credit union promote specific products — such as auto loan recapture services — to members who may need them.

“We want to be able to take data that we have on our core and use that to make sure that if you’re in the market for a car, we’re getting that [relevant information] to you in a channel that’s easily accessible for you,” Casburn said, “[and] at a time and in a way that’s simple for you.”

In other words, access to data can highlight opportunities credit unions might have overlooked, enabling them to offer members additional financial services and encouraging them to take advantage.

A Consistent Credit Union Experience

According to Casburn, one of Seaboard FCU’s top priorities is to deliver the “holy grail” of financial services to its members: a streamlined, omnichannel experience. The CU wants to offer its members an experience that constantly feels the same across all its channels.

“Whether you’re logging in on a desktop, laptop or smartphone, we want the template to look the same,” he noted. “We don’t want to say, ‘You can’t do that on a tablet, but you can do it on home banking.’”

Delivering a consistent experience will also become increasingly important as credit unions seek to recruit more smartphone-savvy millennials into their membership ranks. To appeal to such members, Seaboard FCU is also considering expanding its peer-to-peer (P2P) offerings. This would provide younger financial consumers with the types of tech innovations they have become comfortable using from providers like PayPal, Venmo and Zelle.

But P2P services are not solely appealing to millennials, Casburn said. Baby boomer members are just as tech-savvy, and they want the same innovations too. A recent survey found approximately 40 percent of baby boomers are using smartphone apps and websites as their primary means of interaction with their financial institutions (Fas). Another report found 60.7 percent of them own a smartphone.

In other words, smartphone usage is poised to grow among multiple generations. Credit unions that are slow to offer mobile-first solutions — including P2P transfers — will risk alienating a growing base of customers.

Keeping Members in Focus

Seaboard FCU pairs its commitment to adopting technology that helps address member needs with an underlying approach to service.

That approach is often a more vital asset when it comes to retaining members and in distinguishing the CU from other FIs. According to Casburn, Seaboard FCU’s business philosophy is what helps distinguish it and other credit unions from their digital banking rivals.

“Digital banks are [purely] transaction-driven versus relationship-driven,” he said.

While innovative technology might be in high demand, Casburn believes CUs will have an advantage over banks in the event of a technical glitch or snafu, thanks to their long-standing relationships with members.

“When you’re in a digital environment, everything is good until you have a need or a hiccup in your situation,” he explained. “Everybody has that in their life, and then you’re going to need a relationship. You’re not going to need a call center, a help center or a chatbot.”

Having a strong set of data tools available to determine what members want — and what they may want down the road — could help credit unions build upon those existing relationships. It might also put them in a stronger position to address their members’ current and future needs.