Data Doesn’t Just Come in ‘Big’ Size

By CUToday.info12.04.2017

Credit unions have heard plenty about Big Data. But what about “Medium Data” and even “Little Data?”

Developments in those areas, along with how the convergence of economic, demographic and technology trends need to be considered by decision-makers were all addressed during Raddon’s first-ever national research conference.

The three-day event was attended by more than 250 C-level and marketing professionals from banks and credit unions across the United States, with the content focused on Raddon’s own proprietary national consumer and small business research .

A number of other presenters and keynoters were featured, as well.

Bill Handel, Raddon VP of research and product development, kicked off the conference with a discussion on the convergence of economic, demographic and technology trends and their impact on the financial services industry over the next five to ten years. 

A panel of industry executives discussed how they use data on a daily basis to understand the needs and wants of customers and members. The panelists, including J. Paul Leavell of Nusenda Credit Union, Andre Ievolino from Cabrillo CU, and Bradley Leimer from Explorer Advisory and Capital, discussed the use of data sources such as social media and payments, in addition to the more traditional demographic data, in a holistic fashion to communicate and market more effectively.

Attendees listened to an interesting perspective by one of the panelists on the notion of ‘big’ data, ‘medium’ data, and ‘little’ data. The panelist explained that little data are things that can be accessed and utilized today, while big data are beyond the realistic capability of all but the largest institutions today, simply due to the required resource commitment to access, transform, and utilize this type of data.

Medium data – items that can be accessed today but for which we have not yet built a use case – is the interesting opportunity, the panelist added. 

The panelists also discussed the role that fintechs are playing today in how they use data. For banks and credit unions, the use and structuring of data tends to be fixed, closed and proprietary in nature, while for the fintechs it is open, fluid and shared. The result is greater flexibility leading to innovation at greater speed for fintechs, they told the meeting.

Dr. Jennifer Golbeck, a data scientist at the University of Maryland, spoke to the issue of potential pitfalls in the use of data, noting that with the amount of data now available the potential for abuse is apparent and is seen every day. She cautioned that organizations that don’t establish clear guidelines in regard to how they use data could easily head down the path towards the “creepy” side, as opposed to the “helpful” side, with the result being a negative impact on their brand. 

Golbeck illustrated this point with the account of Target sending maternity solicitations to a 15-year-old girl two weeks before the girl notified her parents that she was pregnant. Target data models had identified that the girl was likely to be pregnant by looking at a wide variety of purchases she had made recently – none of which was a pregnancy test. 

“This widely reported story did not cast Target in a good light; however, every day Amazon targets us with offers based on our purchase patterns and most of us find this valuable,” said Golbeck, emphasizing that the point is to use data appropriately.

Mark Sievewright, who formerly led Fiserv’s credit union division, shared with attendees the big technology trends he believes financial institutions need to be paying attention to.

Sievewright noted that there are over 2,100 artificial intelligence startups in existence today, and that the pace of technology adoption, consumption and diffusion is moving faster than at any time in history.

“Fintechs continue to have an impact on the industry, but other than a few notable exceptions such as PayPal, Kabbage and Square, have not been able to take significant market share, as they lack the brand recognition of traditional service providers,” said Sievewright.

During the interactive meeting held earlier this month, attendees were able to choose from a wide variety of topical discussions, including the emerging Gen Z, the new branch paradigm, the importance and impact of financial literacy programs, measuring and developing your brand equity, meeting the needs of the high-income consumer, the Hispanic market, understanding the needs of small business, and many other topics.

Reprinted with permission from CUToday.info, a leading source of news and resources for credit union decision-makers.