Insourcing vs. outsourcing: 3 questions to ask

Ongoing changes in the regulatory, competitive, and economic landscape are driving many financial institutions to review their credit card program strategy and evaluate whether to invest in growing an internal program or explore an outsourced solution.

What is the true cost of a credit card program?

In addition to processing costs, rewards program management, and network dues — consider costs related to changes in regulations (CECL), variable interest rates, and capital reserves. Administrative costs necessary to support the program include managing risk, fraud, collections, disputes, third-party provider relationships, employee hours, and more. Don’t forget the cost of product and technology maintenance and upgrades.

What do my members need?

It shouldn’t be a surprise that a digital-forward experience is highly ranked, but strong products and reward programs, and fraud protection are closely ranked by cardholders. Many smaller financial institutions have more than doubled their investment in digital transformation in the last few years. Can your financial institution make that investment to meet member needs?


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