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Out-of-the-Box or Outside of the Box: Getting the Most From Your Core

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According to a 2018 study from Best Innovation Group and OnApproach, 45 percent of credit unions do not currently have an analytics strategy in place. Over half of those allocating budget to analytics were planning to spend less than $100k. Only 15 percent planned to spend more than $500k. 

I have spent nearly 15 years developing data systems and reporting for large banks and small-to-medium sized community credit unions. It’s a topic that’s close to my heart. I’ve watched leaders become more aware that they need to invest in data warehousing and analytics, but they are still operating in an environment that has neglected analytics at a market level.  

Large banks and credit unions have traditionally built custom data warehouse and analytic solutions. Smaller organizations resigned themselves to canned reports and ad-hoc query tools included with their software systems. The recent prioritization of analytics has resulted in a proliferation of out-of-the-box data warehouse products. Some of these offerings have come a long way in a short period of time, however I’m still unimpressed with the current lineup, which generally falls into two camps: 

Camp 1 – Data lake-esque reporting databases provided by core system vendors which include data from your core and might allow for uploading tables from additional systems like your LOS, CRM, spreadsheets, etc. 

Camp 2 – Standardized data marts with canned analytics that you need to conform your various systems data to fit into. 

The first camp of data lake-esque reporting databases has been around for a long time. While it might solve the issue of data consumers hitting production databases with reporting workloads and provide some rudimentary mashup of diverse source systems, it fails to address the most common causes of data warehouse project failures.  

Modern data warehouse and analytics projects are expected to democratize data and support a community of self-serving users. These data lake-esque reporting databases are difficult-to-impossible for the average data consumer because they require users to understand too much complexity about source systems and their data structures. Plainly speaking, you’ve spent your analytics budget to make data more accessible, but data consumers are still stuck needing the few people (usually busy developers and core systems administrators) who understand the data. 

The second camp of standardized data marts with canned analytics is the more recent trend.  Standardized data models and reports make for attractive sales demos that speak directly to data-starved executives and managers. These products generally provide a set of canned metrics that most institutions care about. Some even provide benchmarking against aggregated data from other institutions. The challenge is that they are expensive for a one-size-fits all solution, which might include features and capabilities you do not want and completely miss others that you absolutely need.  

The financial sector is rapidly evolving thanks to an influx of digital native FinTech startups. The organizations that will be competitive in the future are the organizations that understand their business and can move quickly. Solutions out of this camp limit your capabilities exactly where you need to be investing, competing, and winning.  

There is a third ‘Custom’ option for Credit Union leaders. I will readily admit that custom business intelligence and data warehouse initiatives have a well-earned bad rap from a long history of multi-year, waterfall projects that never delivered on their initial promise. However, the Agile data warehouse project approach and development tools that embrace automation have changed the reality of delivery. There are now numerous custom alternatives that can provide quick win, high-value deliverables that drive adoption and executive support without signing a high-dollar long-term contract or closing the door on future needs.

Sorry for the long rant, I’m kinda passionate about data warehousing and the opportunities it can create for credit unions. 

Contact CSG Pro to talk about how we can help you find the right custom solution for your data goals and needs. Shameless plug, we can even help you develop the solution and augment your team to achieve your data wins with our Agile data warehouse approach.

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