Katie McCaskey

Americans Heart Outsourcing - Really

Oh, the “o” word: “outsourcing”.

Once a reviled word associated with shipping American jobs abroad, more and more Amercians now view “outsourcing” as something positive. Most recently this includes financial institutions like banks and credit unions.

Take technology, for instance. In an era that demands extensive use of encrypted and protected data, it makes more sense for financial institutions to outsource this aspect of their business rather than build in-house. The data is too sensistive to leave in anything but 100% focused, capable hands. Financial institutions realize the folly and cost of building and caring for proprietary software.

To quote Larry Kallembach, EVP and CIO of US-based commercial bank, MB Financial:

“There were several factors involved in taking the outsourced approach, such as scalability, but one that stood out to Kallembach was that ‘it allowed us to focus on what we are better at, which is banking’. ‘We have some very good technologists, but we have become more of a user and put our strategic focus on the effective use to serve our customers.’” [emphasis added]

Scalibility and technological innovation are both issues we’re solving for Stanford Federal Credit Union, a credit union serving the prestigious Stanford University community. Stanford had an existing technological backbone but needed to securely scale online offering for their members. By outsourcing Geezeo’s technology team Stanford Federal Credit Union is able to offer the greatest (and most secure) value to their members. They, in turn, can concentrate on doing what they do best: serving members.

But is this just an American trend?

Interestingly, this article points to a slower adoption rate of outsourcing in the U.K, Germany, and Australia. when it comes to financial institutions outsourcing their technology needs. The article quotes John Cant, MD of financial services consultancy, MPI Europe:

“[W]hile he can see non-core functions, such as reporting, becoming outsourced more often, ‘we’ve seen less in Europe of banks wanting to outsource their core banking systems’. He feels one of the main reasons for banks not going down this path is security. ‘There’s a cultural aspect to security, people are very concerned about giving that information away.’“  [emphasis added]

Trendspotters: could this mean that American financial institutions — once so quick to curse outsourcing — are becoming some of the biggest outsourcing supporters? As the world becomes more complex and more specialized, it appears specialized outsourcing will dramatically grow in acceptance and use.

Turn that Frown Upside-Down (and Fa$t!)

Image via Wikipedia

Why are so many people dissatisfied with their financial instution? This survey says 67% of Americans would readily consider switching banks. Common sense says this isn’t the way for banks to keep customers or credit unions to retain members.

Yet: there are plenty of folks who know how to treat their people right, right now and right away. You guessed it: by successfully connecting with their people using Twitter.

So, it’s pretty cool to hear about SmartHippo (@SmartHippo) following a customer through her re-fi process. Not only did they get personally involved, they even sent her a congratulatory hippo-decorated cake! No wonder she’s excited to tell people about her positive customer service experience…. on the official blog of another financial service company (Prosper.com)!

With service and attention like that, we’re betting SmartHippo is indeed one of the smartest of the herd! What are you doing to turn frowns “upside down”?

What’s Your “Tweet to Dollar” Conversation Rate?

Image via CrunchBase

Twitter is on everyone’s lips these days, and for good reason. A few months ago I wrote a post titled “Six Surprising Ways Twitter Can Make You Rich”; its purpose was to quickly address the personal benefits of having and using a Twitter account. But what about institutional use?

Financial institutions in general and credit unions in particular seem ahead of the Twitter curve; use of it, observes FinTech Marketing, falls into six broad categories:

“The “Twitter style” of these organizations can be classified into six “personas”: problem solvers, community activists, informers, communicators, social butterflies and sideliners/placeholders.”

Institutions slower to get on board might want to consult this article posted earlier in the week.

Let’s ask a new question. What’s your “tweet-to-dollar” conversion rate?

Think about it as if you were in another country converting your dollars into the local currency. Put X amount in, yield X amount out. Twitter itself is famously free. Yet, what kind of dollar conversion stems from the conversations your credit union is having with members?

Here are examples of hard metrics you could measure:

Savings: Customer service costs = how much saved by shifting to Twitter usage?
Growth: How many new members did you reach, simply by being reachable?
Exposure: Get in front of friends-of-friends-of-members. For free.
Retention: How did you prevent member loss by addresses needs in real time?

Exceptional? You bet. No wonder Twitter’s simple and free tool is your million-dollar, million-member maker.