Recently, I was asked by a credit union “Why would any credit union bring their credit cards In-house?” This was a very intriguing inquiry as I thought Credit Card Portfolios are a very important component of credit union lending. They are a service that most members need, they have a variable rate loan, and they hedge against interest rate risk...PLUS credit unions seem to be craving for loan momentum. This lending avenue could gain a credit union some significant momentum.
I polled a few credit unions and here are 3 very hip trends (stated in my best hip 2014 slang I could muster) in why CU's are bringing their credit card portfolio back In-House:
1. Keep Calm and Don't Lose Control:
- The core system provides all functions needed for the credit card portfolio
- Benefit of centralized communication and consistent decision making.
- Collection and charge-offs maintained on one system and the auditing of activity pre-empt lost account transactions.
- Cross selling and relationship marketing are better opportunities through the credit union
- Credit Union's financials maintained on one system.
2. It's Totes About the Service:
- Members and staff gain real-time transactional access to card account information through the credit unions existing infra-structure; Internet banking, mobile banking, audio response and the mobile application.
- Statement Consolidation for printing and statement rewards centralized in one system.
- Instantaneous card ordering, card issuing and card loan servicing with remote control card management through mobile banking.
- Paperless statements & e-Alerts available on one system.
3. Cost? Whatevs! You will Save some Cray Cray Money:
- Credit unions save 100 percent of outsourced receipt and processing of payments.
- Fifty percent savings on card statement services and twenty percent savings on marketing services.
- The total savings averages between 35 and 50 percent of "pre" In-House credit card costs.
- Credit unions achieve savings through marketing and business intelligence, as they now have the ability to analyze and cross sell against the card information and transaction activity maintained in their core lending database.
- Most credit unions utilize their current card processor for Charge backs, Lost and Stolen Card support, and items of dispute.
The whole point of In-House Credit Cards is to eliminate third-party vendors in an all-inclusive core system. Most credit unions are realizing three very hip trends; greater service, better control and a big reduction in costs. These three benefits speak volumes to the decision of In-House Credit Cards and the ease and efficiency to the staff and to the member.
It's time to consider the switch to In-House Credit Cards, because after all, YOLO. (If you don't have a teenager to ask, I will save you the time: "You Only Live Once").
