The Credit Unions are at the forefront of digital innovation using disruptive technologies. Banks and credit unions actively use technological advances to stay current and provide digital banking services to their customers. This increasing use of technology is leading to an increase in the volume of data that, if used correctly, can enable personalized experiences. The financial industry is accessing various information or data points about their customers to increase productivity and profitability. These data points include spending habits, credit history, product portfolio, channel usage, etc.
Today, most credit unions are still working with old business processes instead of experimenting with new digital initiatives. It severely limits new opportunities to drive change within the organization. Using the right tools and strategies and leveraging all of the above data points can help financial institutions make informed decisions and offer deals at the most convenient times for their customers.
Whether banks and credit unions choose to do their data analysis in-house or through professional third-party vendors, they need to know their data. Credit Unions must consider digital transformation to the smooth working of their organizations and maintain their members’ trust. They also need to consider the accuracy of the data and establish rigorous data management.
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Trends Defining the success of banks and the Credit Union industry in 2021
Data analytics for a Customer-Centric strategy
This approach in the financial industry is critical to delivering customer-centric services. With the advent of digital banking and Big Data, the customer-centric approach now goes hand in hand. According to a study by IBM, 71 percent of banking and financial markets firms believe that leveraging information, including Big Data and analytics, provides a competitive advantage to their business. In addition, 55 percent of all active Big Data efforts identified customer-facing goals as a top priority. By integrating advanced data analytics tools, customer information is evaluated, and actionable insights, such as customer segments, are derived.
Use of AI and automation
The use of automation and AI technologies in banking processes can boost productivity by eliminating tedious, repetitive, and insignificant tasks, allowing employees to focus on more valuable tasks. Such technologies reduce the risk of human error in transactions and ensure consistent results. A McKinsey report shows that banks and credit unions that use AI to automate processes and residual workflows see a more than 50 percent improvement in productivity and customer service over those that do not. AI and automation technology also save time and money for businesses.
Data governance upswing
Rapidly changing regulations and the demand for data security are creating ever-increasing challenges for banks and credit unions. To stay vigilant and keep up with this changing environment, organizations need to ensure that their data is high quality, accessible, and secure. They should also figure out how to better use the data they collect. To establish effective data governance, institutions must prioritize people and organizational structure, data governance processes, and data governance technology. Data governance should prioritize the growing number of data practices, compliance challenges, and economic uncertainties.