Sound Credit Union is leveraging the data of its members to understand how their banking behaviors and needs are shifting during the pandemic, and which financial tools to prioritize to better meet those needs.

“We didn’t know to what degree the [pandemic] impact was going to be, so we just started developing based on how we can best assist our members,” said Troy Garry, chief financial officer at the Tacoma, Wash.-based credit union. “We’ve been capturing data, analyzing our members’ behaviors, thinking about how we can help them manage cash flow and help them budget.”

SCU parsed through member transaction data to see who has been affected by the economic shutdown, and to what degree, Garry said. After noticing a widespread trend of constrained cash flow, the credit union dusted off a short-term, interest-free loan product that had been shelved since government employees were furloughed during the federal government shutdown of 2018 and 2019.

“It’s basically a bridge-type loan to bridge that gap between not being paid and going back to work,” Garry said. “We already had that built out in our core as far as a product, but it wasn’t a product that we typically would go out and use. But when the COVID hit, we looked at how we could leverage this product to help our members.”

This time around, the credit union is digitizing the process by pushing the product out on its mobile and online channels, as more members transition to digital banking. Members can accept the loan by pushing a button on their devices, Garry said, noting that the underwriting and qualification processes for these loans is different from the approval process for a typical vehicle or home loan.

SCU’s cash-flow data enables the credit union to “go outside of the traditional credit box [because] we have enough information to know that we’re comfortable qualifying them,” Garry explained. Already, SCU has issued about 150 of these loans totaling approximately $320,000.

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SCU is using data analytics platform Information Builders Inc. to build data visualizations and reports for the database to measure member behavior and transactions.

The credit union, which is approaching $2 billion in assets, processes about 1.5 million debit and credit card transactions per month, Garry said. “All of this data is captured in what’s called the ‘ATM dialogue’ within our core system,” he said. The lender uses that data to decide which financial tools to launch — such as the bridge-type loan — but also to monitor overall member spend so the credit union can adapt to economic changes quickly.

“Obviously our members are spending less, our savings balances are increased. But really what that impacts is our financials,” Garry said. “Interchange income is a big portion of our bottom line and if you lose 30% of that income, how are you going to make up for that lost revenue?”

The data is critical as the credit union walks a fine line between offering payment relief programs for its 120,000-plus member base and offsetting a decrease in revenue. “We need to understand the impact of the decisions that we’re making internally,” Garry said. “We need to do what’s right for the members, but in order to be here for our members, we still have to make some other decisions to make sure that we’re remaining financial responsible. It’s a balancing act.”