Outsourcing After Hours Customer Services In Credit Unions: Case Study
Outsourcing After Hours Customer Services in Credit Unions
BUSU-630
February 18, 2013
Introduction
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 …show more content…
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 …show more content…
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. Since the roll out of the program USE has experienced significant cost savings in personnel, technology and effectiveness of closing more loans, which turned into increase in ROI. The one negative effect of the outsourcing was the loss of entire mortgage department; including processors and
BUSU-630
February 18, 2013
Introduction
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 …show more content…
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 …show more content…
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. Since the roll out of the program USE has experienced significant cost savings in personnel, technology and effectiveness of closing more loans, which turned into increase in ROI. The one negative effect of the outsourcing was the loss of entire mortgage department; including processors and