Credit Union Spotlight: A Data-Driven Approach to Primary Financial Relationships

Credit union employee meeting with members

People over profits is one of the main principles of the credit union movement. That said, it is necessary to seek out and nurture profitable members in order to support the services and solutions credit unions use to serve their members who need the most help. In order to maximize these efforts, credit unions should identify their primary financial relationships (PFRs) and seek to maintain and grow them further.

Recently, Trellance hosted a webinar with Ideal Credit Union, who explained their data-driven approach to identifying and maintaining their PFRs.

Identifying Your Profitable Products and Members

Ideal recommends a data-driven approach to identifying your profitable products and members. They utilize a combination of data warehouse and an analysis program to review their data and identify those members that bring in the most money to the credit union, as well as the products and services that generate the most revenue.

Using this system, Ideal is able to generate a number of dashboards and reports, allowing them to review the data in real time and adjust their marketing strategies as needed. They are then able to ask questions – what if we increased the number of members with this product, what if we stopped offering that product?

What Are Your Credit Union’s 5Cs?

Not all products at your credit union are created equal, and they won’t all contribute to profitability in the same way. Ideal recommends identifying your five most profitable products in order to focus on building your PFRs. Theirs are the 5Cs:

  • Car
  • Credit Card
  • Cassa (house)
  • Checking
  • Cash (deposits)

For Ideal, cash was added to this list more recently as liquidity became more important. Your credit union’s profitable product list may change, too, as the economy continues to evolve.

For Ideal, they identified products that provided interest and non-interest income, as well as added benefits such an increase in member satisfaction or ensured member loyalty.

Marketing Tactics to Build Relationships

Starting and maintaining a conversation with your credit union’s members is a great way to get them involved with the other products and services your credit union offers, as well as nurturing them into a PFR.

New Member Welcome

Start with a new member welcome. This is an email that goes out the day after a member has joined and welcomes them to the credit union. It should also provide them with a list of available products and services that they can enroll in in order to further encourage their participation at the credit union.

Targeted Campaigns Based on Member History

Use member purchase data to identify those members that have relationships with other financial institutions. Review their purchase history for repeated payments over $1,500.00 – that’s most likely a mortgage. By identifying that, your credit union can offer that member a refinance opportunity and bring that outflow of dollars back into the credit union. Using a similar approach, you can identify other opportunities:

  • Credit card – monthly payments consistently going to another financial institution for varying amounts each month
  • Vehicle Financing – monthly payments going to another financial that are consistent and under $1,200
  • CD/Money marketing – large one-time outflows of cash to another financial

Ideal also recommends identifying members who have recently become unemployed. This is a great opportunity to offer 401k rollover services.

Monitor Maturing CDs

Matured CD money has a bad habit of immediately leaving the credit union for other financial institutions. Your credit union can prevent this by reaching out to those members who have CD reaching maturity in the near future and walking them through their options. This could include rolling that money over into another CD or moving it to a high yield savings account. Work with the member to identify what keeps the deposit with your credit union while still meeting the member’s needs.

Maintaining your PFRs will help your credit union take better care of all of its members. To learn more about Ideal Credit Union’s approach to identifying and maintaining PFRs, watch the on-demand webinar available now.

Aaron Grossman is Vice President of Sales at Trellance. 

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