I always joke that the average banker knows more about the players in their fantasy football league than they know about their customers/members. And I find that to be true even after years of Know Your Customer initiatives that focused on compliance and not always were capitalized as business opportunities.  If my poor joke were to have an element of truth, that would particularly troublesome if you are a banker at a Credit Union.   

That is because:  

• Credit Unions, more than other financial institutions, strive to keep their member’s interests are at the center of everything they do.  But if you miss the clues on their changes in behaviors and preference, how can you deliver on that promise.  The pandemic has accelerated trends that pushed the embrace of Digital Transformation. The typical institution now has more vendors; channel-specific products may go through different back-end systems and less in-branch contact as a source of intelligence.   Hence it is challenging to have an accurate read of the members’ needs and wants, never mind timely detection of changes when they happen. 
• The need to grow. Today, it is fair to say that financial institutions are technology companies that sell banking products and companies.  And the investment required will only increase.  Hence, to deliver effectively and efficiently, you need scale.  Albeit there are many ways to reach scale, organic growth is gaining importance.  In a mature industry where the net number of members doesn’t swing dramatically, a period over period, what you do with the members you already have will only be increasingly important.   

 Without more preamble, these are Flowtrackers’ Three Do’s and Don’ts for Credit Unions to Understanding Member/Customer Behavior. 

 3 Do(s) on understanding CU member behavior

• No pun intended but start by considering how your members behave. Do you know what the behavior is three months, six months, one year after onboarding?  Is there any difference in behavior driven by the member/customer segment? What are the commonalities among those who are acquiring/defecting a given product or service? Do they behave differently by channel? 
• Financial needs can broadly be categorized into Day2Day banking, Borrowing, Investment, and Protection.  Make sure you understand how you cover the financial needs of your members. Consider how you satisfy said financial needs and the direction your relationship with your members is heading holistically. 
• Pay attention to the elasticity of the demand for your product.  Is it always better pricing? Do you offer the convenience of something challenging to match your key competitors easily in your natural market?  

3 Don’t(s) on understanding CU member behavior

• Big Data is an amorphous term that means many things to many people.  But that is a journey.  Don’t be paralyzed by the lack of skills and the investment required.  Before you start exploring big data ask yourself, what else you can do with the data you already have.  Actionable analytics with real business cases are available to you. 
• Stop relying on Transaction Data as the all–in–all for insights. Behaviors are not necessarily reflected in the transactions.  And given that many transactions clearing happens at the checking account, you may even be getting a misleading story. You will be increasingly less relevant to your members if the offers you present are continually missing the mark of who s/he needs as an individual. 
• Don’t think that if a product is not performing, the answer is launching another product. Start by analyzing your history with the product.  If that product’s success is not likely to bring you New Money, think if you want that product to perform better. Otherwise, you may just be promoting the cannibalization of your portfolio areas.   Go deep into how it performs in the various channels, branches, and demographics before you make any decisions.