In
a market defined by economic headwinds, slow growth and constant change, credit
unions in 2024 face mounting challenges. These demand faster, data-driven
decisions that align the needs of today with the goals of tomorrow.

In
response to this, I see successful credit unions investing in growth in a new
way. The emphasis is now on using data intelligently to deliver enhanced value
to members – and Chief Data Officers emerge as the key to achieving this.

The
role of Chief Data Officer (CDO) is becoming a popular hiring trend across the
financial sector. In 2022, over half
of banks and insurers had a CDO, accounting for 22%
of CDOs globally, and the number only continues to rise.

The
potential for credit unions seizing this talent is huge. Those with their
fingers on the pulse have a better chance of delivering member-centric
strategies, growing their market share and reaching their goals for 2024.

The rise of Chief Data Officers in 2024

CDOs
play an increasingly crucial role in our data-centric world, where data
volume is ballooning from 1 ZB in 2010 to an
estimated 175 ZB in 2025.

Correlating
with this rapid growth is the rise of artificial intelligence (AI)
technologies, which hold exciting possibilities for the financial sector. For
credit unions, AI provides the insights needed to enhance member experiences
and adapt to market trends, revealing itself as an instrumental tool to staying
competitive.

But
this must be tempered with the knowledge that with new possibilities comes new
risks, highlighting the need to have someone on board who can oversee and
protect data initiatives.

This
is precisely what CDOs do. Not only are they responsible for the management,
governance and utilization of data, they also identify opportunities for
leveraging that data into business growth, operational efficiency and enhanced
customer experiences.

Through
this work, CDOs are the beating heart of an organization’s digital
transformation, enabling them to harness the full potential of their data
assets.

How the role of CDOs is evolving

As
businesses recognize the importance of hiring Chief Data Officers, their
perception of the role is also changing. 37% of
CDOs had their budgets increased in the
last 12 months and, in Deloitte’s
2023 CDO survey, 66% of CDOs saw their remit
grow in the last 24 months. Today, their top three priorities are:

• Creating,
  updating or implementing data strategy (61% of CDOs)
• Improving
  the usage and availability of insights and analytics (54%)
• Improving
  or providing a consistent approach to data governance (43%)

This
signals CDOs’ evolution from compliance-focused roles to strategic and
proactive leaders, especially in data-heavy industries like insurance (46% CDO
penetration), banking (42%) and media and
entertainment (40%).

The
progression of CDOs into business-critical leaders is reflected in increased
hiring activity. In 2020, 67% of
large corporations had a CDO, compared to 12% in
2012, while in North America, leading firms with a CDO
increased from 33.7% in 2021 to 38.1% in 2022.

As
more businesses become aware of the growth opportunities that CDOs facilitate,
I predict that competition for this talent will begin to skyrocket. Credit
unions, who are at the center of technological change, stand to gain a lot from
CDOs, and must be ready to make opportunistic hires if they want to protect
their market share.

How CDOs support credit unions’ top priorities for
2024

In
the banking industry, credit unions have always led in terms of their community
engagement, and customer service experiences – but banks are catching up. To
stay competitive, credit unions need a more tactical digital strategy that’s
driven by data.

Staying
ahead of the technology curve allows credit unions to future-proof themselves.
Investing in a Chief Data Officer to front these efforts is equal to investing
in the insights needed to remain agile and take a more member-centric
approach.

Chief Data Officers correlate with strong financial
performance

In
Wipfli’s
2024 Credit Unions Report, retaining market share and
meeting member needs are top concerns for 40% and 33% of credit unions,
respectively. CDOs
forge competitive strategies that align with member demands and drive
profitability:

• Tailored
  data strategies enhance member satisfaction by
  leveraging data for personalized services
• Their
  proficiency in analytics boosts profitability by understanding
  member needs, thus increasing engagement
• They
  identify innovative technologies that streamline operations and meet
  evolving member expectations
• They
  promote data-driven decisions, accelerating competitive strategies that
  prioritize member needs for sustainable profitability

Deloitte’s
CDO survey goes on to say that companies with CDOs are twice as likely to have
clear data strategies, allowing them to stay financially competitive.

58% of CDOs view AI initiatives as their primary
responsibility

CDOs
are essential for monitoring data and developing robust AI strategies.
According to Gartner’s 2024 survey, AI now
falls within the primary scope of 58% of CDOs,
a notable rise from 34% in 2023. This new focus is vital in aiding credit
unions’ chief goal: improving digital member engagement, identified as the top
priority by 51% of credit unions this year.

Strengthening
AI strategies is imperative for gaining actionable member insights, offering
personalized experiences and increasing retention. But AI is only as good as
its data, and good data starts with good governance. This underlines the
importance of hiring a CDO.

By
orchestrating data management and utilization, CDOs safeguard data quality,
security and ethics, developing AI initiatives that align with organizational
objectives and member value. This not only enhances operational efficiency, but
also member experiences and engagement.

CDOs are crucial to developing data literacy across
departments

Per
the Wipfli study, talent management is another top priority for 51% of credit
unions today, with a further 65% reporting that talent shortages impede
progress towards goals.

CDOs
fill the
digital talent gap, not only by overseeing and
optimizing data-related functions, but also by fostering a data-driven
consciousness within the organization. In fact, 75% of CDOs surveyed by
Deloitte said they viewed improving data literacy as a key objective.

Enhanced
data literacy is conducive to a more innovative, efficient and risk-averse
culture, where people are empowered to make data-driven decisions and mitigate
potential threats.

Organizations with a CDO have fewer security
compliance issues

For
33% of credit unions, regulation compliance is a top concern for 2024. CDOs
provide much-needed assurance by spearheading the compliance initiatives needed
to navigate complex regulatory landscapes.

With
a CDO, credit unions honor ethical principles and regulatory guidelines when
handling data. This not only builds trust and transparency with members, it’s
also a cornerstone of enhancing brand reputation and driving long-term
profitability.

Setting a new standard for performance

Chief
Data Officers strike the perfect balance between the innovative and secure use
of data. Despite this, 73% of
CDOs feel their role is poorly understood.
This lack of knowledge could be why credit unions haven’t fully embraced the
role – but it’s only a matter of time.

Digitally-enabled
organizations set the bar for performance. As banks begin to double-down on
their offerings to clients, credit unions can’t rely on reputation alone – they
have to get proactive. Forward-thinking credit unions are the ones leveraging
the value of CDO talent to remain competitive and relevant during this critical
time of change.

To learn how you can tap into top CDO talent and
make greater strides towards your goals, contact me today.