Not all data is created equal. Just because you are collecting mountains of data, it doesn’t necessarily mean you have good data. In fact, it’s much easier to collect and use bad data.
What is Bad Data?
Bad data can be a host of things. It can be incorrect or outdated information. It can include incomplete or partial information that creates an incorrect picture of a member’s needs or preferences. The difference between good and bad is often subtle, and having the correct tools to analyze and categorize this data can help your credit union make better decisions, both for you and your members.
Here are some ways bad data can harm your credit union.
Bad Data Can Breed Distrust
Bad data can create redundancies and incorrect outcomes in your credit union team’s workflow. For example, if you have incomplete data that is passed on to third-party vendors, like collections agencies, those vendors will treat every account the same, even if some of them aren’t actually past due on their payments.
If your members, who are current on all loan or mortgage payments, receive notices from your third-party collections vendors saying they are past due, this could create distrust between you and your members.
It Affects Your Lending Ability and Reputation
Lending is your credit union’s primary source of revenue, and keeping the program strong often comes down to how accurate and timely your data is.
CUManagement talks a lot about the integrity of data. They use the example of a credit card interest rate: if your member’s interest rate on their credit card goes up due to late payments, it should also come back down if their payments start coming on time. But if you don’t have a solid system of checking these rates and what affects them, this can upset your members and also go as far as pushing you out of compliance with certain rules and regulations.
It Affects Your Ability to Stay Compliant
If your data isn’t properly organized and assessed, it can decrease your credit union’s ability to stay compliant. And that non-compliance can affect your credit union’s revenue streams, as well as its reputation and bottom line. And trying to set your data right after years of mismanagement will be a long and expensive process.
It Also Affects Your Marketing Success
Data has helped revolutionize marketing, especially when used correctly. You or someone you know has likely said this in the past several years: “Sometimes, I think my phone (or computer) can hear me think. Just the other day, I was thinking about how I’d love to buy (insert product here), and then today I see an ad for it on my Facebook page.”
Intuitive data collection and utilization can be a game-changer for your credit union, but it can also cause problems if you’re working with bad data. You could send emails to people with the wrong name or other personal information, or you could target the wrong potential customers for a new service you are rolling out. All of that decreases your brand’s reputation and costs you money.
Keep Your Data Safe and Up-to-Date
Contact IMS for more information.