Outsourcing After Hours Customer Services in Credit Unions
February 18, 2013
Credit Unions are part of the financial services industry that operates in constantly changing environment. Credit unions have been attracting customers and growing their business by focusing on the “credit union difference” defined as not for profit but for the idea of service and people helping people. They are popular financial alternatives among many people that value being treated like they “own the place” and who expect the best quality customer service. The Credit Union’s main focus has always been on customers needs by providing financial solutions with smart investments options, advice and great products before calculating any profits from its operations. USE Credit Union has gone through many challenging process improvements and changes within its supply chain that allowed for more efficient and more customer friendly approach. The goal is simple; keep our customers happy and increase the credit union’s profitability. Credit Unions have to accommodate for all demands and improve its performance by being more efficient and more innovative to sustain its existence. “Innovation is a response to emerging customer needs, or it can even be a way to create new needs” (Swink.,M, 2011,p.33). The purpose of this paper is to evaluate if USE Credit Union should expand its outsourcing services by offering 24/7 customer support by phone to accommodate our customers’ needs and increase the overall satisfaction. According to FSO Knowledge Xchange research “credit unions accounted for 18 percent of all outsourcing deals in 2011. Over the last three years, outsourcing activities by commercial banks have declined, whereas deals by credit unions are on the rise” (FSOkx, 2013). The change in outsourcing trends is due to increasing customer needs that have made credit unions to rethink its strategy. The fierce competition from banking institution for each customer have forced credit unions to accommodate new technologies and new processes. I believe that outsourcing call center operations could create opportunities for increase in future return on investment and increase in customer base. I will discuss how the current outsourcing of internal services has benefited the credit union and created more options for growth. I will recommend outsourcing as a way to enhance the service and reduce operating expenses and increase sales. Analysis
Organizations, including credit unions “must determine which resources and activities should be provided by the firm (insourcing) and which should be done by its suppliers (outsourcing)” (Swink,.M, 2011,p.289). USE Credit Union has made strategic decisions to focus on its current and future core competencies, which are serving customers and increase in satisfaction with lower costs to the credit union’s bottom line. Two years ago, the credit union decided to outsource its mortgage processing and servicing department to PHH Mortgage, online banking platform to Intuit, and it teamed up with LPL Financial to expand customer’s investment opportunities.
USE Credit Union used to offer in-house originating, processing and servicing of mortgage loans, but the offered products did not meet the customer expectations. Credit Union’s members were looking for low down payment, interest only and adjustable products that the USE could not offer. After the analysis of operational costs and the needs of the organization the credit union outsourced its processing and servicing to PHH Corporation, still allowing its loan officers to originate the mortgages. The process was complex and took few months to develop but the outsourcing had a very positive outcome. It allowed USE to earn income from each loan origination at the same time limited the risk of defaults and servicing costs. PHH Corporation is a business partner that provides outsourcing of mortgage solutions to USE Credit Union....
References: (n.d.). In USE Credit Union. Retrieved February 16, 2013, from http://www.usecu.org/home/home
Swink, M., Melnyk, S. A., Cooper, M., & Hartley, J. L. (2011). Managing Operations Across the Supply Chain. New York, NY: McGraw-Hill Irwinc.
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