Many credit unions outsource credit card management of both the product and servicing to third-party vendors because their core system is not capable of handling that element. However with outsourcing, you lose significant control of the overall system and your member data. In fact, the credit card business for credit unions can become so cumbersome that some resort to selling off their portfolios and getting out of the card business altogether.
Like other types of loan offerings, credit cards have unique characteristics that have deterred credit unions from bringing them in-house. However, it can be done in-house and done well! The first step is having a core system that can take on the task of running your credit cards.
The proper core will manage and maintain cardholder data from a single system. And it should include both debit and credit cards with full service features that allow access to card history, payment information and card maintenance.
Take this a step further by adding a single card manager within your credit union who only works on this piece of the business and you have a recipe for success. CUTimes recently reported about a Tennessee based credit union who did just this and achieved great things. Their Credit Card Program Manager was previously an underwriter at the credit union, and said while he lacked direct experience managing credit cards, he was familiar with credit card risk and had some very specific ideas for the kind of credit card he believed the CU's members would need.
The results have proven what a difference the right strategy can make for a credit union. Hashmi noted, “I have seen my colleagues who often manage three or four different programs and each of those takes time. Managing the credit card program is all I do and it benefits from having all my attention.” In addition, his goal was to “create a series of turnkey marketing programs in 2011 and 2012 that would help both promote and grow the card, and give him more experience in card marketing.”
He added that his background is helpful because he often assists underwriters work through challenging credit card applications and tries to personally check each credit card application that comes in. “It's the extra focus that helps bring the results,” he said.
A full time dedicated staff person on the card program may be too much for your CU, depending on its size. For this reason, choosing the right credit union core technology to partner can make a huge difference in the amount of time and resources you have to put towards the program.
Today’s core systems should allow for seamless integration with your card products creating efficiencies for both staff and members. And ensuring the right staff member is assigned to your card program as a dedicated resource can further your chances at success. FLEX treats your credit card as another loan suffix, providing real-time card information to your MSRs and instant card access to your members. See how FLEX can help your credit union today:
