As the convenience economy continues to rapidly empower consumers with technological wonders to manage their hectic lives, businesses are struggling to keep up. Historically, companies have studied data to make business decisions based on what happened in the past. Today, however, they are realizing that the vast amount of data at their fingertips can enable them to make decisions based on what may happen in the future.
The digital footprint each consumer produces has grown exponentially over the last 10 to 15 years. Combined with advances in data analytics, businesses now have the ability to develop insights like never before, and they are investing heavily in that strategy.
According to the International Data Corporation (IDC), worldwide revenues for data and analytics will grow from $130.1 billion in 2016 to more than $203 billion 2020 - an increase of more than 50 percent in just four years. And while spending is happening across all industries, banking has been leading the pack. In 2016, banks invested nearly $17 billion and are projected to increase spending to $22.1 billion by 2019. Part of the reason for this increasing adoption is quite simple—it works. The Harvard Business Review reported that 48.4 percent of Fortune 1000 companies say their firms are achieving measurable results from big data investment, with 80.7 percent characterizing those results as being “successful.”
These results should be a wake-up call for credit unions to consider a data analytics strategy and gain a deeper understanding of their members in this digital age.
What can you do with data? Think about Netflix. By analyzing the bits of data their users generate in terms of viewing habits and ratings, the company can offer specific program recommendations for individuals that they’re more likely to want to watch. This service adds value, builds loyalty and - since there’s less need to hunt for something to watch - delivers a convenient customer experience. Value. Loyalty. Convenience. Three benefits credit unions seek to deliver.
As innovative technologies continue to evolve to meet the growing demand for convenience, the data supply won’t slow down, and neither will the enhancements in data analytics. In fact, in March 2018, the IDC predicted that that business spending on “cognitive and artificial intelligence systems will reach $19.1 billion in 2018, an increase of 54.2% over the amount spent in 2017.” This has significant ramifications for analytics, with machine learning able to analyze data at a scale humans simply cannot. As Forrester notes, it will “drive faster business decisions in marketing, e-commerce, product management, and other areas of the business by helping close the gap from insights to action.”
From card swipes to website clicks and everything in between, your systems are filled with member data. Add to that the information available from your providers as well as publicly, you begin to realize the question you should be asking isn’t “do we have enough data?” The real question is “what are we going to do with all the data we have access to?” Remember - when you know your data, you know your member.
Tim Peterson is President, AdvantEdge Analytics.