Why should you outsource your back office?

In order to cut costs, financial institutions (FIs) are continuously seeking ways to save money and maintain the returns that are expected by their stakeholders. While there are a number of ways to cut costs, one effective and efficient method is back office outsourcing.  By transferring labor-intensive processes to an experienced outsourcing partner, FIs can maintain reliability and integrity of daily operations while improving customer satisfaction and business results.

Outsourcing Opportunities

There are a number of outsourcing opportunities FIs should consider to make the shift from a legacy model to a leaner solution that can reduce expenses and streamline operations. 

• Dispute Management: From inquiry through chargeback and resolution, an outsourcing partner manages the dispute process and is responsible for all customer commutation and dispute documentation. When customer dispute volumes are unexpectedly high, an outsourcing partner’s flexible capacity enables them to handle inquires in a timely and efficient manner.
• Fraud Research and Investigation: Similar to dispute management, an outsourcing partner researches and investigates claims from the initial communication through chargeback activities on fraudulent transactions.  The partner also executes merchant re-presentments for items that are charged back and reviews presentment documentation.
• Card Redelivery: To optimize successful redelivery of cards, an outsourcing partner performs checks to monitor address and status changes and manages the tracking, researching and re-mailing processes.  Additionally, partners store returned plastics in an area compliant with cared association rules and destroy cards and pin mailers when returned by the postal service as necessary.
• Customer Correspondence: Handling customers’ written correspondences related to statement requests and account maintenance can be a labor-intensive communication and printing/mailing process. This can be managed by an outsourcing partner more efficiently.
• Settlement: Daily settlement activities, ranging from management of suspension to items requiring research or correction can be handled by an outsourcing partner. This also will typically entail control and audit functions from the partner, including general ledger, reconciliations and rejects and returns.

Choosing a Partner

FIs should take numerous factors into consideration when choosing a partner to handle back office outsourcing.  With any partner selection, choosing an organization that has demonstrated a deep understanding of the financial industry and is committed to quality and continuous improvement is critical to the success of the relationship. FIs should also be confident in a partner’s ability to be technologically innovative and to work with an infrastructure that enables reliable, error-free operation capabilities and supports continuous process improvement.

An outsourcing strategy should be determined based on business objectives, such as the need for accelerating change, cost avoidance and staff expenses. By taking advantage of back office outsourcing, and choosing the right processes and partners, FIs can streamline business, cut costs and improve overall service to customers.