“If payments are the path to growth; data is your roadmap,” Nish Modi (CO-OP SVP, Group Owner, Integrate Products) told credit union professionals at our recent THINK Virtual Power Lunch, entitled “A Whole New Way to Utilize Data.”
As member interactions become fewer and far between, due in part to the disaggregation of financial services as well as the acceleration of digital banking brought on by the COVD-19 pandemic, payments data has become one of the most valuable assets to a credit union. Analyzing and activating your payments data can not only drive interchange revenue and growth but also enable you to understand what your members need now and anticipate what they will need in the future.
For example, a look at CO-OP Credit and Debit portfolio spend through the first six months of COVID-19 reveals the rollercoaster financial impact many members have felt from the pandemic.
Overall spending volume declines, shifts from credit to debit back to credit, major spikes in essentials spending mixed with compression in popular categories like travel and entertainment – payments data reveal deeper insights about the lifestyles of members, which can be used to help support their financial wellness.
“Payments data gives us a look into the lives of our members and how they’re using their money,” said Heidi Hawkes, Member Relationship Manager at Town & Country FCU. “Like most issuers, we saw an initial decline in balances, purchases; but as things settle back down, interchange and transaction volume went back up. What did change, however, was the way in which members were spending. All of a sudden members were fixing their home, instead of travelling and going on vacation.”
Payments data can also be used to determine where to invest in products and services that will help you serve those members more effectively. Contactless payments, for example, have seen exponential growth and demand throughout COVID-19. The same can be said for P2P or digital wallets. While none of these are new digital innovations, they are quickly becoming an expectation among members, forcing credit unions to react quickly in order to integrate these solutions into their payments offering.
However, while it is an incredibly powerful tool, data presents a conundrum: Credit unions are sitting on a trove of valuable data about their members but many struggle to consolidate, access, and ultimately make decisions based on it.
“The challenge most credit unions have is too much data and no way to easily analyze, validate, scale and enable it,” says CO-OP Chief Data Officer Matt Maguire. “They’re having a difficult time separating out the noise from the value.”
Maguire points to the fact that when it comes to payments, members are distributed across multiple channels, such as mobile, online, point-of-sale transactions. Which means that, in order to really understand a member’s payments behavior, a credit union needs an entire data ecosystem built upon a solid data management strategy and governance practices, dedicated owners and stewards of that data, the right tools to access it and, most importantly, a sound internal data culture.
“If you don’t have the basic disciplines and culture to value your data as a critical asset, it’s going to be difficult to keep pace with those that do,” Maguire says.
Taking Small Steps Towards Payments Activation
While data activation is a massive undertaking, the key is to start small.
“Don’t try to boil the ocean,” Maguire says. “Prioritize your business objectives and focus on what you’re trying to accomplish.”
For Chris Taylor (Card Operations Manager at Elevations Credit Union) overall portfolio performance and fraud data are traditionally the most important metrics in his world. However, when COVID-19 hit, cardholder spending became more and more sporadic and he found himself needing much more detailed information about his cardholders, such as card activation rates and transaction- and BIN-level spending data. Identifying the data points he needed was the easy part, but finding a way to make them easily accessible was a whole other challenge:
“Understanding core data versus processing data and then capturing all of that [data] and on top of all that maintaining all of those dashboards really takes a lot of bandwidth,” he said at the THINK Power Lunch. He also pointed out that payments data is shared across multiple departments within his credit union, which means everyone will need easy access to that data and the ability to interpret it correctly.
Actionable Insights Now A Click Away: Introducing CO-OP Insights Center
Luckily, credit unions don’t need to pursue their data efforts alone with the launch of CO-OP Insights Center, a web-based business intelligence reporting platform designed to help credit unions understand, analyze and activate their payments data.
“Insights Center simplifies your complex portfolio information into usable insights and dashboards that show you the health of your portfolio across debit, credit and ATM, and gives you key opportunities to grow it,” says Modi.
Key Benefits of Insights Center:
- The ability to easily view the health of your credit, debit and ATM portfolio, through metrics like: total interchange, total transaction volume and spend, as well as average cardholder spend, and card activation rates
- The ability to drill down at the BIN level to see which merchants and categories are driving the highest interchange
- A summary of approved and declined transactions provide a data point to evaluate performance of your authorization strategies.
Built for Credit Unions with Credit Union Input
Like other CO-OP solutions, Insights Center was developed using the feedback of credit unions through our beta testing program. Elevations Credit Union was an early beta tester of the Insights Center and Taylor is already using the platform to analyze the credit union’s card activation rates and spending patterns.
“Insights Center is a great way to see how our cardholders are behaving,” Taylor says, “It helps us drive card usage, and monitor user activation and spending data.”
Taylor says the dashboards are an easily digestible source of truth that he can use to report up to leadership and make strategic decisions around the portfolio.
Town & Country FCU was also a beta tester of CO-OP Insights Center and Hawkes says that the key benefit has been the real-time data visualization.
“Whether it’s interchange, transaction or portfolio analysis, I no longer have to wait for someone to help me find the answer. I can see all of that data immediately, which is really helpful when I need to provide an update to leadership or if there’s a red flag I can quickly spot it.”
The initial release of CO-OP Insights Center gives credit unions powerful insights into their credit, debit and ATM portfolio; however Modi adds that CO-OP will continue to build out Insights Center with plans to include peer benchmarking, predictive analytics, portfolio and member segmentation, and campaign management.
How to Get Access to CO-OP Insights Center
CO-OP Insights Center will be available to all CO-OP Credit and Debit Processing clients. If you would like more information, please visit: www.co-opfs.org/insightscenter or contact your CO-OP Client Business Executive.