Turning consumer data into a crypto product
PYMNTS interviewed Greg Glawsoninformation manager at UNIFY Financial Credit Unionabout how his company leveraged member data to design a new product to meet their needs.
—
In a world flooded with consumer data, credit unions (CUs) have a unique opportunity. While selling this data to third parties is a commonly permitted and largely profitable endeavor, CUs have the opportunity to use it in another way: to leverage it to design, develop and release new product offerings tailored to their members’ needs. Some CUs already do this.
Glawson explained that UNIFY had been looking at developing a cryptocurrency-related product for some time. However, the company decided that before developing a product based on crypto’s general hype alone, it should see if its members’ data provided any clues as to how best to proceed. It did.
UNIFY’s data-driven approach to product development
“By leveraging information from a variety of different sources – [such as] debit card transactions, [automated clearing house]-linked accounts via online and other sources – we could see that our members were engaged in crypto and [moving money to] institutions like crypto.com or Coinbase,” Glawson said. “And that really helped inform that this is something our members are interested in.”
After analyzing its data over four to eight weeks, UNIFY knew that members were particularly interested in bitcoin. Based on this insight, CU set out to develop a product to enable its members to get involved in crypto. UNIFY partnered with NYDIG, a FinTech focused on crypto solutions, to offer customization and integration functionality. In October 2021, UNIFY went live with its product, becoming the first CU to allow its members to buy and sell crypto through a website and mobile app.
Using data effectively and responsibly
When asked what the barriers are to designing new products based on consumer data, Glawson first emphasized the importance of responsible handling of the data.
“We really see it as our responsibility to safely manage our members’ data,” he said. “And so we have to make sure that we take the right care when we examine, collect, normalize or aggregate data so that we have all the information we need to make the informed decisions and don’t have data that we don’t actually need.”
Glawson explained that UNIFY typically utilizes data in a way that does not necessarily involve the use of personally identifiable information. In a process known as anonymizing or sanitizing data, UNIFY may group segments of members by geographic region, type of account relationship data, and other anonymous data points to gather necessary insights into consumer behavior without compromising the privacy of individual members.
The next major challenge in the effective use of data concerns technological difficulties. Glawson noted that there are often resource constraints—either internally or with vendor resources—and timeline difficulties associated with educating both consumers and employees about the new product.
Finally, Glawson noted that CUs need the right process in place to use data effectively. Companies need to know what data they have access to, where it is located internally, how they can best interpret this data and whether different departments use the same criteria for data collection.
“Often, institutions don’t know where this data is or how to access it,” he explained. “So understanding this data map would be a big piece of advice. Second, we’re big believers in data democratization. No individual owns data, whether it’s from our core banking system or whether it’s from our marketing system—at the end of the day, it’s the organization’s data.”
He warned that companies still need a person or department to take the lead when it comes to data. These people must take responsibility for managing the data and ensuring that the organization has a common understanding of definitions.
