Branch transformation seems like a win-win. Credit unions are able to reduce staff and their physical branch footprint to cut costs while providing customers access to alternative banking technology – which is how consumers like to do business anyway. But there is one problem nobody seems to be addressing.
All of the activities involved in branch transformation revolve around increased technology. Whether it's iPads, custom software, digital TV, touch screen computers, enhanced WiFi and so forth – a credit union's legacy system is not equipped to handle this demand. Especially with IT budgets being cut or remaining flat and with the branch employing less staff.
Some financial institutions do not have employees with the highly technical skill set that much of the self-service and digital banking trends require. Plus, keeping staff trained on that constantly updating technology is costly.
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So how can a credit union feasibly make the transformation to be competitive and operationally efficient?
For the answer, credit unions should look at their big business counterparts. The pace of technology evolution is fast – and for many staying up to date AND ensuring regulatory compliance is too much to handle. Outsourcing IT has become the norm for companies to increase or update their technology offerings quickly without big capital expenses or variable maintenance costs.
Being with Diebold and EDS for many years, and now HTx Services, I understand the value of an outsourcing partner. Not only can they provide day-to-day support, help desk services to ensure continuous operations, and the ability to fix any IT or ATM problem quickly, but service providers can often help with bigger more strategic IT ecosystems as well.
For example, third party partners can offer a customized end-to-end service offering to fit a credit union's specific needs. Technology as a Service can address a range of benefits such as guarantee of up-to-date hardware, minimal upfront IT investments and regular software upgrades and patches.
Larger credit unions can also leverage a service provider for a broad scale enterprise IT deployment. It can be difficult to implement a new technology to every branch to launch simultaneously, which could be part of a of a transformation initiative. By outsourcing the project, credit unions gain access to the service provider's national logistics capability and highly trained field service team, and could expect a successful IT installation without operational disruptions.
Handing off IT and ATM maintenance to focus on other revenue-driving business activity seems like a no-brainer, so what's the concern?
Some credit unions worry that a lot of time and resources will need to be directed to managing their vendor(s), and that they'll have to "rip and replace" their existing technology. In reality, there are service providers that are hardware and software agnostic. Whatever infrastructure you have in place, they'll work with it – saving you time and money, and even better, increasing your existing ROI.
Instead of outsourcing ATM support to one provider and IT to another, seek a partner that offers full wall-to-wall support for financial institutions, managing everything from ATMs to desktops.
And while many service providers market themselves as providing complete banking IT solutions, do your homework. The last thing you want is that discussion with your risk and compliance team on the service provider's third and fourth party providers.
Anthony Nocelli is the national sales director for the Hauppauge, N.Y.-based tech support firm HTx Services. He can be reached at [email protected] or 516-287-2201.
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