“It’s time for bed little mouse, little mouse. Darkness has fallen all over the house.”
As a credit union executive, does this children’s nursery rhyme apply to you? Answers may vary, but for most, the answer is likely to be no.
In today’s highly competitive financial services environment, delivering innovative, self-service solutions to your members is critical to long-term success. Turning out the lights and “sleeping” is difficult because delivering these solutions 24 x 7 x 365 is mandated as the norm. With increased regulatory scrutiny, the burden of increased compliance requirements, and more than a decade of low interest rates, your ability to successfully meet all the demands of the marketplace is as challenging as ever.
One prevalent industry trend that is offering relief to credit union executives is outsourcing. So why would you consider outsourcing your core? Again, answers may vary, but most executives find tremendous value in the following:
- A credit union’s core competency is financial services. For many, IT Services is not a core competency. Partnering with a company who delivers outsourced services allows you to focus on your core competency, while they focus on their own.
- IT resources are very expensive. Focusing valuable resources on revenue-generating services, growth, and project management is more beneficial to overall business objectives, as opposed to hardware upgrades and release loads. One CEO succinctly said, “We are too little to afford and too big not to have.” This exemplifies the challenge faced by so many, as executives juggle to balance business objectives with available resources for project implementation.
- Expansion of your IT staff by leveraging resources and automation made available through outsourcing. When in-house, IT turnover can significantly hamper operations. Few credit unions are able to adequately cross-train, and talented IT resources are easily lured away to more lucrative opportunities. Outsourcing frequently makes business analysts, programmers, and other customer service representatives more readily available to better support your operations.
- Predictable growth. As an in-house client, when new products are purchased, they typically include capital investments. In contrast, outsourcing typically features a predictable expense based upon a monthly per-member fee. For many, this makes the acquisition of products and services both predictable, as well as more affordable.
- Someone else is responsible for new compliance requirements. Our regulators continue to mandate new requirements for audit, security, and business continuity. These can frequently cause stress and require credit unions to reallocate resources. Companies who offer outsourced services invest significantly in disaster recovery infrastructure and are required to test with greater proficiency and with more detailed results. The norm for companies who outsource is to have multiple data centers, with production running for six months in one location and the other six months in the secondary site. The benefit is that if the inevitable disaster occurs, due to the frequency and thoroughness of testing, clients are familiar with processes and they will enjoy better success in a real disaster situation. Additionally, when the next compliance requirement is announced, for example encryption for data at rest, this is no longer your responsibility or financial burden.
For many credit union executives, if the question is posed, “What keeps you awake at night?” many will respond that it is negative publicity resulting from a security breach, fraud, or a disaster from which it is not easy to recover. Additionally, the most valued asset that any credit union has is its reputation and brand. All of these are more easily protected and likely more thoroughly addressed through outsourcing.So rest easy, little mouse. When the lights are turned out at your credit union, outsourcing will deliver a cost-effective, secure and 24x7x365 service for you and your members.