Utilizing big data in the credit union industry

The National Federation of Community Development Credit Unions helps low- and moderate-income individuals achieve financial independence by organizing, supporting, and investing in credit unions that serve underserved communities. The Federation’s members provide financial services to over 4 million customers and hold $32.5 billion in assets. Yet, while the corporate banking industry has been using data analytics for years to generate better customer insights, prevent fraud, and reduce customer attrition, the credit union industry has lagged behind. The Capstone team was tasked with identifying why credit unions have hesitated or struggled to implement smaller-scale data analysis initiatives which could improve the financial health of both their member institutions and the clients they serve. The team designed a needs assessment survey, identifying key insights to guide the Federation and their members in developing data analytics capacity. Additionally, by conducting informational interviews with industry experts and performing a literature review, the team identified a clear business case for implementing data analytics at credit unions, using strategies appropriate for the level of resources within each individual organization.