DES MOINES, Iowa (11/12/13)--Three credit card teams at credit unions in Illinois, Washington and Iowa discuss their eye-opening experiences with data analytics and provide advice in a new white paper released last week.
Data analytics is a long-term strategy in which results take many months to appear, said "The Data Analytics Experience," issued by Des Moines, Iowa-based payments processor The Members Group. But financial institution leaders are finding that analytics has the potential to change their entire culture of decision-making.
In the paper, IH Mississippi Valley CU, based in Moline, Ill., shares how data analytics enhanced its cash advances and balance transfer deals. The credit union's goal was to grow its credit card portfolio by 25% within one year. It offered two promotions to credit cardholders that included cash advances and balance transfer deals.
The $869 million asset credit union went against the grain with its strategy of offering deals only to cardholders identified as most likely to respond by TMG's partner, IQR Consulting. The consulting firm, instead of looking at one or two criteria, reviewed data from several sources, including credit bureaus, credit card statements, prior campaign results and checking account histories. It analyzed which categories of cardholders should receive which types of offers.
So far, the promotion has yielded more than $2 million in cash advances or about 10% of the credit union's entire portfolio. "Our plan is to use data analytics to really dial into the people who use our cards to understand better what they need from us," said Curt Johnson, assistant vice president of mortgage and card services at IH Mississippi Valley CU.
Also in the paper, Spokane (Wash.) Teachers CU, with $1.7867 billion assets, tells how the successful use of segmentation strategies in its credit card portfolio influenced its other departments, and the $1.99 billion asset University of Iowa Community CU, Iowa City, Iowa, notes that data analytics helped take its already successful cards program to new levels.
"Data analytics is not reinventing the wheel; it's reshaping it," said the paper. "Often these strategies simply boost the results of programs a card team is already familiar with, like balance transfers, holiday promotions or line increase.
To download the free white paper, use the link.