Sandy, Utah (August 21, 2017) — Credit cards have become a critical offering for credit unions in their consumer lending strategies. Since the beginning of this trend, institutions have outsourced their credit card product and servicing to third-party vendors. Like other types of loan offerings, credit cards have unique characteristics that have deterred credit unions from bringing them in-house, mostly because their core systems have not adapted. In fact, the industry has led credit unions to this solution as dominant core system providers force out-sourced processing services for credit card loans.
The FLEX Credit Card solution integrates card ordering and card loan servicing seamlessly into the core, rendering substantial cost savings and efficiency in serving credit union members. It also empowers members and staff with real-time transactional access to card account information through mobile banking, estatements, eAlerts and various other core service channels. Minimal third-party access is still valuable for fraud protection and chargeback services at a substantially reduced cost.
“While most credit unions on FLEX Credit Cards tout better member services and operational efficiency as the reasons for switching to in-house credit cards, we are also witnessing direct and substantial savings to their bottom-line,” said Sean Holcomb, COO of FLEX. Credit unions are realizing an average of 100 percent savings on what they paid to third parties for outsourced receipt and processing of payments, 50 percent on card statement services, and 20 percent on marketing for an overall saving between 35 and 50 percent. These credit unions also achieve savings through marketing and business intelligence, as they now have the ability to analyze and cross-sell against the card information and transaction activity maintained in their core lending database.
Carrie West, VP of Finance for Raytown-Lee’s Summit Community CU ($60 million) in Missouri, says that the reason their three branches converted to in-house credit cards was to provide better service to their 9,500 members. “Since 1992, FLEX has always offered us the right solutions for our members’ needs. Our conversion to FLEX’s In-House Credit Cards has been extremely successful in every aspect,” said West. “We are realizing monthly cost savings, can see everything we need to see in member data and love having complete control of the system internally with back-end support. The best part is that it is so easy we no longer need a card coordinator on staff.”
Todd Hilling, President and CEO of Sheridan Community FCU ($32 million) in Wyoming includes in-house credit cards in their list of integrated offerings for their 4,400 members. “The whole point of changing over to FLEX was to eliminate third-party vendors in an all-inclusive system,” said Hilling. “I have used third-party add-on products for credit cards in the past and to serve members we had to make a phone call or go to an outside website to gather information. Although we are finding monetary savings, the biggest benefit of FLEX In-House Credit Cards is the ease and efficiency of the system.”
Steve Dalecki, Chief Operations Officer of ARC FCU ($61 million) in Pennsylvania, has found that using in-house credit cards has solved many problems his credit union has experienced in the past. “Although we were able to offer real-time support with debit exchanges, our old third-party credit card program did not work at all,” said Dalecki. “FLEX’s one-stop shop has made it much easier for our front end staff who can now see balances, activity, and information live. In addition, we have saved a few thousand per month on the expense side. It is so nice to have everything integrated through the FLEX core system.” ARC serves 11,300 members through two branches.
FLEX, known for embedding superior technologies into a single-core solution, has proven to reduce credit unions’ core system complexity and IT resource requirements to less than half of today’s industry standard. This advantage benefits credit unions of all sizes, whether deployed as in-house, cloud or a hybrid of the two.