Data transformation should not be rushed, least of all by technology.
The lack of a definitive strategy is the single largest barrier to data transformation. Without a detailed roadmap, credit unions can easily go off course in what can be a highly complex journey.
While a strategy-first approach to data analytics is paramount, it’s impossible to ignore the importance technology and system architecture play in analytics success.
As credit unions develop a roadmap for analytics implementation, it’s helpful to consider their data environment with a futurist mindset. That can be difficult, especially in today’s highly saturated marketplace. With hundreds of vendors pushing countless data and analysis products designed for today’s business, it can be hard to pick up the true signal from all the noise. Often, credit unions that jump into purchasing technology too quickly find their data program’s growth stunted.
CUES member Rob Keatts experienced the pains of inflexible data technology when he joined Chartway Federal Credit Union, Virginia Beach, Virginia, in 2016.
“We were just about to sign a contract for a turnkey data warehouse-in-a-box, but decided to put the brakes on,” says Keatts, the $2.2 billion CU’s CIO. “We wanted to pause and get a true understanding of what we were getting from the product. And while it may have been great for reporting, the warehouse was not structured for advanced analytics or predictive modeling, which is where we were headed. Had we moved forward, it would have been two years of discovery to figure that out. It’s a misstep we almost took that I’m grateful we recognized before we were too far in.”
The Future of Analytics Is in the Cloud
Over the past several years, across engagements with credit unions of various sizes and analytics maturity levels, we’ve discovered unmatched value in cloud data technologies. This is a shift, not only for those of us leading AdvantEdge Analytics, but for many data experts. The industry’s top thinkers once believed on-premises hardware was the best way for the movement to achieve analytics success. Regulators influenced a lot of this thinking. Fortunately, the tide is turning among examiners who have taken the time to learn more about the technology and the information security benefits it brings to the financial space.
Chartway FCU’s Keatts has experienced this first-hand. “For a long time, credit unions didn’t put data in the cloud for fear of questions they couldn’t answer from regulators,” he says. “Based on conversations I’ve had with examiners, they understand it much better. Credit unions understand it much better, too, and are better able to answer those tough questions. As long as we do a good job securing data in the cloud, regulators see the benefits, particularly around backup and disaster recovery.”
In addition to data security, cloud platforms also lend scalability to a credit union’s data transformation strategy. With the exponential increase in data volume, variety and velocity, there isn’t a credit union server room in the world capable of processing at the level we’ll all need in the blink of an eye.
The other essential benefit to the cloud is its ability to scale up as easily as it can scale down. As credit unions traverse the data transformation journey, there will be micro discoveries that require processing power to expand and contract. Credit unions already struggle to stay afloat in the seas of innovation thanks to the anchor of inflexible legacy technology. Data analytics in the cloud offers an opportunity to break free of rigid, outdated systems and start fresh with a modern, scalable approach that evolves alongside a data program.
Idaho Central Credit Union Director of Innovation & Engineering Aamir Khan has experienced the value of cloud solutions as his $4.5 billion credit union in Pocatello has begun to evolve its data analytics program. “We took our time to explore on-prem vs. cloud solutions, and ultimately decided to implement AdvantEdge Analytics’ data warehouse as a service,” he says. “It was important to us that we not have to do a lot of investment in terms of hardware. The solution allowed us to gradually follow our strategy, which we were able to begin doing even before we had all of our data people in place.
“We’ve since seen how easily the cloud allows us to scale out,” Khan continues. “It allows us to get up and running very quickly and in full alignment with our objectives.”
Khan also says the cloud enabled Idaho Central CU to get data insights into the hands of users outside the tech team. “It was nice not to have to build up the entire data pipeline,” he says. “We just had to source the data through Power BI and make it available for SharePoint. It was a much faster experience than it would have been otherwise, and it has made consuming the data much easier for our staff.”
Technology is just one piece of the data analytics puzzle. Yet it’s where too many organizations start. Although data is powerful and transformative, data transformation should not be rushed, least of all by technology. Credit unions that have the discipline to delay technology integration until a strategy is in place will earn much greater (and much faster) return on their analytics investment.
Shazia Manus, CCE, CSE, is chief strategy & business development officer for CUESolutions platinum provider AdvantEdge Analytics, Madison, Wisconsin. A credit union data pioneer, Manus has a rich history of data transformation firsts. She oversaw the movement’s first investment in leveraging offshore analytics capabilities and co-created the first member attrition model for credit unions using big data principles. For AdvantEdge Analytics, she applies a futurist view to the field of analytics, helping both the company and its credit union partners discover new possibilities for exceptional member experiences.
John Papadia leads consulting services for AdvantEdge Analytics. He specializes in building data-driven cultures at credit unions—transforming how they serve members and reach new ones, minimize risk and compete in a changing financial services landscape. Papadia and his consulting team have expertise that spans the entire data and analytics lifecycle. They bring their Fortune 500 experience to each engagement, tailoring deliverables to the credit union's vision and goals.