CUNA Mutual Group: The Great Data Demand Facing Credit Union CFOs

By Mike Defnet, CUNA Mutual Group

CFOs are challenged to support the decision-making abilities of a larger swath of the organization. In fact, growing expectations for responsiveness was cited as one of the biggest challenges facing CFOs in today’s financial marketplace. As the number of business units demanding data-driven guidance grows, so too does the CFO’s need for highly consumable, real-time and accurate financial performance data. 

By Mike Defnet, CUNA Mutual Group

Credit union CFOs have used data to help their C-suite colleagues set strategy for decades. They are no strangers to the power of business intelligence. What has changed in recent years, however, is the pace at which CFOs and others across the credit union leadership team are pressured to make decisions. Competition from fast-moving and agile newcomers requires leaders to make in days the kind of bold moves that would traditionally take months to evaluate. 

In addition to the need for speed, CFOs are challenged to support the decision-making abilities of a larger swath of the organization. In fact, growing expectations for responsiveness was cited as one of the biggest challenges facing CFOs in today’s financial marketplace. As the number of business units demanding data-driven guidance grows, so too does the CFO’s need for highly consumable, real-time and accurate financial performance data. 

Reimagined Analytics Helps CFOs Make a Stronger, More Predictive Case

Of course, data is only part of the picture. The credit union leaders calling on their cooperative’s CFO for direction are chiefly concerned with insights rather than data itself. They need the CFO’s perspective around the anticipated profitability or loss impact of the strategic move on the table at that moment. Therefore, the finance team needs much more than access to information; they need tools capable of accelerating data analysis so they can provide reliable predictions around the initiative in question. It’s why predictive analytical modeling is quickly becoming a go-to tool of the CFO trade. 

It’s also why credit unions need access to a dynamic, persona-based business intelligence tool that provides CFOs and other business users with daily updates on a full set of financial metrics. Such a tool eradicates reliance on monthly reports generated two to three weeks after month- or year-end. The analytics and reporting generated help CFOs better plan, present and monitor financial strategy. 

The monitoring piece of the typical CFO’s responsibilities is greatly enhanced by faster access to better and more dynamic data. It’s extremely tricky to continually audit the health of an organization if you’re using outdated or error-prone information. Daily data allows CFOs and their teams to make stronger recommendations around the credit union’s efficiency, financial growth, mitigation of risk and even innovation strategy. The ability to manage financial performance proactively has the added benefit of being able to spot and mitigate issues in real time, rather than waiting for an audit. 

The Department of Commerce Federal Credit Union (DOCFCU) has relied on a dynamic business intelligence tool to make more informed decisions and improve returns for the more than 18,000 members it serves across Washington, D.C.

Evan Clark, president and CEO of DOCFCU stated, “Our management team is under increased pressure to deliver bottom line performance while providing the highest returns possible to our members. This tool has helped us to identify those members who are most profitable for our organization and assisted in the decisions revolving around opening new markets for future growth.” 

Data Analytics Helps CFOs See Outside as Much as In

In addition to the macro pressures around speed and responsiveness described above, credit union CFOs, specifically, have an acute need for a peer comparison module. The collaborative nature of credit unions means leaders are continuously sharing best practices and ideas around innovation. There is much less sharing around financial performance, however. While the willingness to share may be there, it’s fairly time consuming to gather up the level of detail a fellow credit union CFO might need to draw meaningful conclusions around how well their credit union’s financial performance stacks up against similar cooperatives.   

Although the finance team has a strong need for data analytics, it’s no stronger than any other team working to improve the financial lives of a credit union’s membership. Setting today’s credit union CFOs up for success requires a strong focus on enterprise-wide data transformation. And, that calls for a well-defined strategy backed by a roadmap of incremental wins to keep the credit union pushing forward. As your credit union maps out its own analytics transformation journey, consider creating a guidepost around empowering your CFO with automated financial performance analytics and reporting.

Mike Defnet is President of AdvantEdge Analytics.  Contact him at mike.defnet@cunamutual.com.

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