Taking the First Steps on the Data Transformation Journey

The following is an excerpt of Pacific Service Credit Union’s own story of becoming a more data-driven organization.

The 2008 Great Recession opened a lot of eyes, and a lot of doors, for financial services providers. As consumers began to see more clearly the distinction between megabanks and community financial institutions, credit unions had an opportunity to make the most of the newfound interest in “people before profits” banking.

At Pacific Service Credit Union, we jumped on the opportunity, and over the next 10 years, completely rebuilt our lending, online account opening, payments and online and mobile banking programs to offer a combination of the best tech-forward options with consumer-centric service.

When we finally emerged from the heads-down work of completely re-engineering our infrastructure, we realized we had more work to do. Although we had built it, new members had not come. Even among our most loyal members, engagement wasn’t as high as we’d hoped. Despite all the service delivery enhancements, and the fact that 83 percent of our members called themselves “members for life,” just 65 percent said they considered Pacific Service their primary financial institution.

From the board of directors to executive management to the frontlines, every team member understood that investing in the credit union’s analytics maturity was the most important initiative within our strategic plan. With access to an extraordinary amount of data from our service providers, we knew we could gather the actionable insight needed to leverage our rejuvenated infrastructure to provide a superior member experience.

Collaborating with data experts kick-starts multi-year journey

After evaluating several vendor solutions, we selected CUNA Mutual Group’s AdvantEdge Analytics as our partner. With AdvantEdge Analytics, we could accelerate our journey by leveraging their resources for the more labor-intensive and time-consuming processes of building the data warehouse and cleansing and organizing the data. Beyond that, AdvantEdge Analytics had developed proven predictive analytics models that could be deployed almost immediately.

The AdvantEdge Analytics team, along with our leadership team, developed a strategy tailored to the business problems and opportunities we most wanted to address. The objective was to generate quick wins to ignite a passion in our team members who would be heavily involved in our transformation to a data-driven culture. To that end, nearly all of our senior leaders and department managers participated in a series of training workshops to lay the cultural groundwork for the road ahead.

Immediately following training, short-term goals were established, such as funneling data from our core system into a data warehouse. We then layered in additional data sources, like our online banking and our consumer and mortgage loan origination systems. AdvantEdge Analytics consultants assisted our team in understanding which sources provided the most comprehensive data needed to develop our use cases.

Longer-term goals were also identified, including the activation of a series of predictive models. We opted to focus first on a model to convert indirect members into fully engaged members with whom we could pursue primary financial institution relationships. The indirect lending conversion model was able to identify any member in our database who joined the credit union as a result of an indirect auto loan. AdvantEdge Analytics’ proprietary model then provided a list of members who had the highest propensity to accept an additional product like a credit card, personal loan or mortgage.

After the first week of the pilot program, 18 percent of the members contacted had opened at least one additional share or loan product. This extraordinary conversion rate is a direct result of the training provided to the member outreach team and the intelligence behind the predictive analytics model. We were thrilled with the early success and our members’ responsiveness to the calls.

We have only just started our data transformation journey, and yet our early steps have already yielded exciting results. Quick wins in visualizations, training and outbound relationship-building are igniting exactly the momentum we’d hoped. Importantly, business intelligence is becoming an even more palpable part of the culture at Pacific Service.

To read more about Pacific Service’s data transformation journey so far, visit AdvantEdgeAnalytics.com/taking-the-first-steps.