8 Reasons to Use a Credit Union Call Center Outsourcer (Part I)

by: Steven Holmes, VP Strategic Development, AnyHour Solutions

This article is the first in a two part series exploring the benefits credit unions gain by partnering with a call center outsourcer.  By “outsourcer” here we’re referring to a U.S.-based inbound call center provider who specializes in financial services and is equipped to take some or even all of a credit union’s member calls on a 24/7 basis.  Our focus for purposes of this article will be on the most common outsourcing service:  taking inbound member calls.

These services can range from simply taking member loan applications over-the-phone to complete member services support.  Complete member service support requires that the outsourcer maintains a real-time, secured interface to the credit union’s core data processing system.  Some providers will accomplish this via the shared branch network interface; others will instead write a direct, secured interface via the core system middleware – the latter option resulting in a much more comprehensive level of support.

The top reason cited by credit unions for using a third party outsourcer is to maximize service to their members.  The other seven benefits of outsourcing all contribute to this ultimate member service goal.  We will explore three here and the others in part II:

1. Enhance Operational Efficiency.  Abound Resources’ recent report entitled Insights into 2012: Credit Unions Balance Growth, Efficiency and Compliance shares the results from its annual survey of senior credit union executives from across the U.S.  The reported #1 CEO cost saving priority for 2012 is improving efficiency ratios/becoming more efficient.  The outsourcers challenge is to achieve the proper integration of people, processes, and technology to affect the highest efficiency levels.  Due to advanced economies of scale and call center business focus, outsourcers can maximize their operational efficiency and spread this benefit out among their many credit unions.

Outsourcers also tend to have better access and knowledge about the rising tide of call center technologies (e.g., agent workflow systems, new phone/ACD systems, CRM software, and various other on-demand/cloud applications, etc.)  They must keep up-to-date with technology to remain competitive.  The need for ongoing, enhanced agent training such as crafting email responses, handling online text chat sessions, or even social network interfacing – not to mention the considerable infrastructure to support these activities – can be beyond the realities of many credit union internal call center operations, but is common with outsourcing providers.

Outsourcers know the tangible and intangible costs of agent turnover.  They adopt strategies to maximize “agent engagement” resulting in higher agent productivity rates and typically lower turnover rates than experienced in credit union internal call centers.  These savings can then be passed on the credit union in the form of lower service fees.

2. Reduce Operating Costs.  In addition to the obvious costs of MSR wages and benefits (normally calculated at 25% of the MSR wage rate), a credit union must also factor in additional operational costs of an internal call center that are often overlooked or underestimated.  Some of these cost areas include supervision, overhead (i.e., IT costs, specialized hardware/software, phone systems, ACD, IVR, call recording, workflow management, etc.), and turnover/attrition (40-80% annual turnover is common in the call center industry with costs ranging from $5,000 to $20,000 per agent for recruitment, hiring, training, etc.)  A conservative industry estimate is to consider turnover costs to average 15% of a MSRs salary plus benefits plus cost of supervision.   In addition, the intangible losses from turnover can dwarf the hard costs considering lost productivity from reduced morale/engagement of remaining employees, lost institutional knowledge, and lost business.   Turnover is one of the most underestimated cost variables of running an internal call center operation and a silent killer of profits that cannot afford to be ignored.

3. Increase Loans.  The credit union call center industry began nearly twenty years ago by taking member installment loan applications over the phone 24/7.  This service is still provided today and being used by many credit unions as a supplement to their lending efforts.  This gives the credit union member an expanded window of time to apply for a loan.  The application is taken by the outsourcer and subsequently delivered to the credit union for final approval/fulfillment.  Typically, the credit union only pays a nominal fee to the outsourcer when an application is taken.  The outsourcing companies have developed their own lending software to take the application, though some provide the option of using the credit union’s web-based system so the application automatically interfaces into the core processing platform.  This streamlines the application input process and eliminates the need to rekey the application data.

All of these costs are absorbed by the outsourcer who then charges a simple per-application fee for loans taken and a per-minute fee for member service calls.
In part II of this series we will look at the other five top reasons to use a credit union call center outsourcer with, again, all of these reasons contributing to the ultimate benefit/goal of maximizing service to members.

Steven Holmes is in his third year with AnyHour Solutions and holds the title VP of Strategic Development, primarily overseeing the sales and marketing functions.  Steven has extensive financial industry expertise having held various direct sales and marketing capacities with a handful of technology companies – some Fortune 500 – all providing services to the financial industry.  Fifteen of those years he has served strictly the needs of credit unions.

AnyHour Solutions is a leading provider of comprehensive, professional, 24/7 call/contact center outsourcing services for credit unions.  These services can be to supplement an internal call center with overflow and after hours/weekend call support, or to satisfy a total member call outsourcing requirement.  www.anyhoursolutions.com