Last updated: February 2nd, 2021
This post begins a regular series, Analytics in Action, explaining how credit unions can use data to improve financial performance and member services.
Guest Blogger: Troy Garry, Chief Financial Officer, Sound Credit Union
I’m writing this from Washington State as cases of the COVID-19 virus are increasing every day. Like all businesses, our credit union is responding to the health risk to our employees, members, and the public by limiting travel, promoting hygiene, and preparing to close facilities if needed.
As a credit union, we also have a special obligation to help our members cope with the financial consequences of the crisis, whatever proportions it reaches. Many people could face disruptions in income, unexpected increases in expenses, or both. And they may have to change how they conduct their day-to-day affairs, including banking.
Our plans are evolving to meet the changing circumstances, but it’s clear our response will be faster and more effective because we have invested in a significant upgrade to our business analytics capabilities over the past few years. This gives a unified view of every aspect of our business.”
Our plans are evolving to meet the changing circumstances, but it’s clear our response will be faster and more effective because we have invested in a significant upgrade to our business analytics capabilities over the past few years. This gives a unified view of every aspect of our business.
Not least, we have a real-time view into the financial condition of our members. Our analytics can correlate income – from direct deposit transactions – with spending on credit cards, debit cards, and checks. When there are signs of financial difficulty, we can reach out to members with products to help them through the challenging times. Sometimes, in fact, we may be able to bring their attention to an emerging financial vulnerability before they notice.
At Sound Credit Union, we first experienced what we could do with data and analytics during the government shutdown in December 2018 and January 2019. We used our new analytics platform to look at direct deposit transactions from government agencies and identify members whose incomes were reduced by the shutdown. This not only flagged members who worked for the government but also companies affected by the shutdown.
We then offered those members a 90-day interest-free loan, an amount based on an individualized analysis of the disrupted income. If they held loans with us, we offered an option to skip payments during the shutdown. The program was a great success, and everyone paid us back in full.
There’s no question that if the COVID-19 outbreak continues to expand in our area, some members will suffer income disruptions. The cruise industry is a significant summertime employer in our region. Some members, unfortunately, will also have to cope with unexpected medical or child care expenses. We will be able to use our capability to understand individual financial needs to reach out to them with loans and other timely financial products.
We will also need to support members who choose to reduce their exposure to public places or are asked to self-quarantine. We’ve already started communicating with members to highlight how they can handle routine transactions through our mobile apps, website, and phone center. If needed, our data analysis capabilities will allow us to reach out to members who frequently use branches to offer whatever support they may need to use our remote banking products.
As CFO, I’ve been looking at various scenarios for how the outbreak might affect our overall business. This involves everything from considering how falling rates could prompt mortgage refinances to how extended social isolation will reduce credit and debit card spending. In the past, it would have taken days for a team of analysts to pull all this information together. Now it’s all at my fingertips.
Nobody wants to face a public health emergency, natural disaster, or economic disruption. With command of data and analytics, however, I know we are in a better position to understand and respond to these changing circumstances for the benefit of both members and employees.