‘Data-Driven Intelligence’ Helps Credit Union Members Navigate Inflation’s Challenges

If there’s one universal certainty right now, it’s that everyone’s examining the household budget.

As Yvonne Stelpflug, senior vice president of Advisors Plus consulting at PSCU, told PYMNTS, it’s no surprise that the economy and persistently high inflation “really is top of mind for all credit union members.” Though inflation’s growth rate has been slowing over the past several months, it’s still well beyond the desired 2% rate targeted by the Federal Reserve.

And against that backdrop, she said consumers are finding they need to shift their spending behaviors. A slowdown became especially evident during the holiday shopping season, where spending growth slowed to single-digit percentages. Credit card debt increased, as the Federal Reserve has estimated that balances were up 7% in the month of December. Delinquencies are also on the rise as individuals have spent down a significant amount of pandemic-era savings.

“As we’re entering this new year, consumers are really reporting that they’re trying to reduce their spending,” said Stelpflug.

Consumers Want Help

They’d like some help along the way, she told PYMNTS. And there’s a gap between what consumers want, expect and demand from their credit unions (CUs) … and what they get. In fact, joint research from PSCU and PYMNTS found that 21% of CU members believe that their financial institutions do not understand their financial needs — and many do not believe that their FIs are doing enough to manage the rising costs of living.

These consumers, she said, “want personalized experiences from the FI — and if they get ‘blanket’ advice and not the personalized experience they’d prefer, it will work against the financial institution.”

There’s an opportunity, she said, for FIs to fine tune and improve their engagement with those members. “Data-driven intelligence is key,” said Stelpflug.

She said that as CUs collect and analyze consumer-level data, and link events and insights across different platforms, they’ll get to a 360-degree member view that allows them to offer a personalized set of experiences and advice. The outreach must be done across all channels, “whether that’s in the branch or over the phone or digitally — especially digitally in today’s world,” she said. The collection and analysis of data, she said, is aided by artificial intelligence (AI) and advanced technologies that integrate with marketing and messaging efforts.

The personalization, she said, gives rise to member loyalty and trust. And loyalty and trust, she said, create a high level of appreciation.

“Oftentimes they may be using a credit card,” she said of CU members, “but maybe there’s a better solution for them, or maybe they need relief in another way. They’re not the experts on our products. They have a problem or a job to be done or a goal that they have in mind. Our job is to help connect them to the right solution or options.” She noted that buy now, pay later (BNPL) is an area especially ripe for financial education and outreach as many individuals may not be aware of the advantages — and potential pitfalls — of using this payment option.

The same endeavors of analyzing data and engaging with consumers also have benefits in the Main Street economy, where small and medium-sized businesses (SMBs) are vital CU members, said Stelpflug.

“They have the same wants and needs and desires. It’s just a matter of focusing in more at a business level instead of a personal financial journey,” she told PYMNTS. “Same techniques, different topics.” SMBs, she said, benefit from insights into how to access and manage working capital more efficiently, or tap into new lending products to navigate the current macro uncertainty.

Looking ahead beyond the current inflationary environment, she said that CUs will have the opportunity to help members realize the “next level” of their financial dreams and goals.

“We’re always going to have different journeys. That’s when the life-cycle stage management starts to come into play,” she said, “and the data will tell us what’s next on the horizon as the financial institution acts as that that trusted advisor … for the long haul.”