By Ray Birch
LAKEWOOD, Colo.—A company that specializes in providing back-office support for credit unions says data analytics is the next big opportunity for CU collaboration, possibly as big an opportunity as shared branching was years ago.
CU Service Network CEO Doug Burke told CUToday.info that he thinks credit unions see the big opportunity presented by data analytics and also the roadblock ahead for many that want to effectively leverage this important tool.
“I think many credit unions realize this is an area in which they don’t have a strong internal skillset,” he said. “They may have some talent here, bits and pieces.”
Burke emphasized that a lot of credit unions are acknowledging they simply “don’t know what they don’t know” when it comes to data analytics and are considering collaboration as a means to excel in this area.
“I believe data analytics is ripe for the collaborative approach,” said Burke. “I think this is an opportunity as big as shared branching was years ago.”
Burke reiterated that the key issue around data analytics is that it is a solution credit unions must have in order to compete, but having the internal skillset to capture all the data and digest it is difficult for many credit unions, especially smaller ones. As experts have repeatedly told CUToday.info, data analytics can be a powerful tool to help credit unions deliver the right services to the right members at the right times in their lives. However, skilled staff are needed to interpret and work with the data, as well as set parameters for the systems.
Burke noted it’s difficult enough to find people with the talents and skills to make sense of all the data a credit union has. Even when a skilled data analyst is found, it becomes another challenge to retain that person, especially for smaller CUs unable to offer significant salaries. Those are some of the reasons he said CU Service Network is considering adding data analytics as one of its next service offerings.
Backoffice Support
Burke said that the issue and challenges with data analytics is not unlike what credit unions are facing with compliance and accounting, where CU Service Network already provides backoffice support.
Doug Burke
“What we are finding in both accounting and compliance at credit unions is that these areas are growing but smaller credit unions, like those under $100 million in assets, can’t afford a true CFO. They might have an accounting manager or split the work among several people,” said Burke, who added that accounting and compliance support are the two fastest growing areas of its company.
CU Service Network began four years ago providing back-office services to credit unions, focusing on accounting services first, and then expanding offerings to include IT, human resources, shared branching and compliance.
What’s getting in the way of greater CU collaboration in general, as well as greater use of outsourced back-office services, according to Burke, is too many credit unions waiting to hit a “pain point” before they make the decision to work together.
“There is a lot of discussion about credit union collaboration but they are not always good about actually doing it—at least not immediately,” said Burke. “What we generally see is that credit unions think about collaboration but stick it out on their own until they run into an issue—say one of their skilled staff leaves and they have a hard time finding a replacement. Generally there is a trigger that gets them to the point of realizing they need help and then finally decide to address the problem.”
Collaboration Needed
Burke said that this is too often the case with smaller credit unions and could jeopardize their future.
“These credit unions absolutely need to collaborate, but they don’t always agree to do it,” he said. “Some are so independent that they think they can continue to fight the uphill battle. But the key to successful collaboration is the credit union has to have the desire to thrive.”
Whether the CU works with CU Service Network or partners with other credit unions on back-office support, the goal, said Burke, is to free up staff so they can focus on the things needed to do to grow the business.
“They have to do more than just want to manage their way along,” he said.