We are living in a material world... wiser words have never been spoken from the mouth of an 80's pop icon. Credit cards have allowed material girls (and boys) to ramp up material possessions with ease, for nearly all income levels. According to a 2016 Harvard study, 94 percent of upper-middle-income Americans have a credit card, whereas only 59 percent of low- to moderate-income consumers in the US carry one. No matter the demographic your credit union serves, the majority of your members rely on their credit cards, and this serves as an additional source of revenue for your CU...give them proper credit, or they'll just walk away. If your credit card management system is via a third party, there are three main reasons you need to switch to in-house credit card processing: 1, Operational efficiency. 2, improved member services. 3, cost cutting measure.
Operational Efficiency: It is no secret that finding a trusted technology vendor can be a daunting task, and often times takes a few iterations with multiple partners to get it right. Your credit card offering is no different. There are many sharks in the tank wanting a bite of your member base. If the core technology you have in place enables you to offer in-house credit cards in a simple, easy to use manner, you can cut back on the growing number of vendors you have to manage by utilizing the resources your core offers. Time-to-resolution for member support issues is also decreased as additional web portals or phone calls to third party vendors is eliminated, and the information you need to address any questions is easily available, makings your MSRs more efficient at their job.
Improved Member Service: Members will appreciate your MSRs having a full view of their entire portfolio. When they sign up for your CU's credit card, they are doing so with the belief they are going with a place they trust to look out for their best interest. If it becomes clear over time that you are outsourcing credit cards, you run the risk of eroding the trust, and perhaps opening the possibility that members will be less loyal to your offering. Members and staff alike will benefit from having a seamless integration with the core for real-time transactional access to card account information through your desktop and mobile banking apps, paperless statements, eAlerts and various other core service channels. Plus having access to all of this data can make customized marketing and cross-selling to members, based on their spending habits, that much more effective. More personalized reward programs to your demographics are possible when you work with a core that is flexible.
Cost Savings: With the right core processing system, credit card integration can be seamless to the point that you will be able to run a card program without the need for staffing a large department or paying a 3rd party vendor to manage the process. In our article What’s Holding Your Credit Union Back from In-House Card Processing, we point out that many of the processing features you normally pay for in a full-service environment are eliminated and others are blended into your daily operations, enabling in-house card programs to save you money.
Credit card programs are key drivers to your CU's growth. In many cases, these programs can contribute to a third of CU's annual earnings! But don't neglect the fact that they are also a great way to attract new members and maintain member loyalty. Understanding these intangible benefits will make you want to provide superior products and services.
