Credit unions are customer-centric businesses. They attract a close-knit community of loyal members that love the one-on-one attention that credit unions provide. And since customer service is so central to credit union operations and core principles, it makes sense that these institutions would want to do everything they can to keep their members happy. But how do they keep everyone satisfied? With back-office outsourcing, credit unions have more time and resources to focus on their members. If you run a credit union, here are a few compelling reasons why you should consider outsourcing your back-office tasks.
What is Back-Office Outsourcing for Credit Unions?
To understand why back-office outsourcing improves credit union customer service, you first need to know what it involves. Back office outsourcing is the process of delegating some or all of your back-office processes to a third-party provider. The specific back-office tasks the provider handles vary from vendor to vendor. Some are end-to-end back office providers, meaning that they take over your processing, allowing you to focus solely on the front or middle office. Other vendors provide just one or two specific services, such as automated call centers, data analytics, or portfolio management.
If you’re looking to improve your customer service specifically, here are just a few of the back-office tasks you can delegate to an experienced third party:
- Fraud detection and risk management;
- Payment processing and repayment scheduling;
- Member contact information and communication preferences;
- Loan or credit card application decisioning;
- Level 1 support;
- Customer web portals;
- Automated call centers;
- Back office to front office communications;
- Staff training and recruitment.
You may be thinking, “What do some of these services have to do with managing customer relationships?” While the front office handles most of the direct customer communications, the back office also plays an important, if indirect, role in this process. Many of the services listed above make it easier for front office staff to perform their jobs. However, customers also appreciate when credit unions have efficient back offices, even if they don’t realize it.
Think of it this way: would you rather join a credit union that is well-organized and efficient or one that’s disorganized and inefficient? The back office sets the tone for the entire business. When it runs smoothly, everything else can too. Here are some of the ways you can leverage your back office to maintain a better rapport with your members.
Want Better Customer Service? Improve Your Back Office
With back-office outsourcing, credit unions could see significant improvements in customer communications and retention. There are eight main reasons why back office outsourcing has such an enormous impact on your members:
#1: Outsourcing Frees Up Your Staff
When your back office is taken care of, you can spend more money and resources on your front office. This could mean having more customer service representatives available to handle member inquiries. Rather than burning the candle at both ends trying to manage the back and front office at once, your in-house staff can focus their full attention on credit union members, making them feel truly special.
#2: Efficient Back Offices Increase Trust
The back office handles all data collection, storage, governance, analytics, and security. It’s also the back office’s responsibility to assess and manage risk using methods like predictive data analytics. By automating and outsourcing this process to the experts, your customers can rest easy knowing that this data is in good hands. You can even set up alerts for suspected fraudulent activity on your customers’ accounts, keeping them safe 24/7.
#3: You Can Answer Your Membes’ Questions More Thoroughly
When a customer calls in, they want to speak with someone who can confidently answer all of their inquiries. It’s easier for your customer service representatives to do this if they have access to all of the most updated and relevant information. Outsourcing your back-office operations means that your front and back office share more of this information.
#4: It’s Easier to Stay in Touch with Your Members
Your back office manages details like member contact information and communication preferences. By outsourcing this service to a capable call center or back-office provider, you can maintain positive relationships with your customers. And if your members move or change their preferred method of communication, your back office will keep track of these updates. It shows customers that you listen to their needs and value their membership.
#5: Members Receive Application Decisions Fast
No credit union member wants to wait weeks for a decision on a loan or credit card application. If you can get them a decision the same day—or better yet, in minutes—after they apply, you’ll attract more customers. Back office providers can use advanced automated decisioning software to speed up this process.
#6: Technical Support is More Reliable
Third-party back-office providers also offer customer web portals where members can access their information, apply for loans or cards, or chat directly with customer service representatives. Normally this technical support system would be difficult to manage and costly to maintain, but when you outsource this system, you can reduce costs and give your customers better technical support.
#7: You’ll Offer Members the Most Competitive Loans and Rates
Credit unions are known for having exceptionally competitive lending terms and interest rates. But this is only possible if the credit union accurately assesses risk. With a reliable back office predicting risk using the best data analytics, you can structure loans that are very attractive to members without putting your bottom line at risk.
#8: You Can Focus on New Products, Services, and Promotions
Less time spent on the back office side of your business operations means you can spend more time thinking about new services to offer your members. And these new products and services are easier to introduce because the back-office service provider will incorporate them into the system for you. Back office data analytics can also help you find pain points or opportunities to improve the customer experience.
This list of benefits isn’t comprehensive either. When credit unions outsource their back-office tasks, they often notice many more subtle advantages that are unique to their business operations and workflow. You’d be surprised what you can accomplish when you no longer have to think about your back office.
The Most Effective Way to Outsource Your Back Office
To gain all of the benefits of back-office outsourcing, credit union decision-makers should start by finding an end-to-end provider with experience in the credit union and lending industry. This is very important. Generalized back-office services aren’t the right fit for credit unions because the provider may not have a satisfactory understanding of compliance issues, loan and credit card risk, data security, or other challenges unique to the financial sector.
Instead, you should work with a back-office provider that understands your credit union inside and out. They’ll not only make sure your members get the highest level of service, but they’ll also help you stay ahead of important trends and technological advances in your industry. Your back office system should constantly evolve and become more efficient as new technology becomes available. Your customers will also appreciate the convenience of a sleek, modern banking system. They can easily check their accounts, make payments, and take advantage of the services you offer without running into any snags along the way. It’s the perfect recipe for customer satisfaction and loyalty.
If you want to make processes as convenient as possible for your members, get in touch with defi SOLUTIONS. We are an end-to-end back-office services provider with years of experience in the financial and lending industries. To find out more about our comprehensive credit union services, contact our team today or register for a demo.
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