The Case for Centralized Back Office Functions

The world of financial services is becoming increasingly complex, and credit unions are no exception.

With hundreds of vendors to manage, the risk of exposure to security threats continues to grow. The importance of streamlining operations to safeguard member data and ensure smooth operations cannot be overstated. That’s where centralized back-office functions come in—a simple yet powerful solution that can save credit unions time and money while enhancing security.

It’s no secret that hackers are always on the hunt for vulnerabilities. One credit union CEO recently shared that a plumbing maintenance company’s email account was hacked, which gave bad actors access to the credit union’s member data. Think about that—a vendor responsible for plumbing maintenance became the weak link in the chain, allowing cybercriminals to penetrate a financial institution’s sensitive information.

While it sounds ludicrous at first glance, it’s not. Financial institutions are under constant assault from those looking to exploit any weak point, including third-party vendors. And this makes the case for centralizing back-office functions even stronger.

Do You Have Real-Time Backups?

What’s more alarming is that many credit unions don’t have real-time backups. In the event of a cyberattack, they could be down for days, leaving their members without access to funds or services. Such downtime is costly and damaging to the trust members in their credit union. In today’s fast-paced world, nobody has the patience for that kind of disruption.

While common sense says centralizing back-office functions should be a no-brainer, it’s not always an easy sell. Why? Because it requires a high degree of collaboration and a shift in how credit unions typically operate. Yet, hundreds of credit unions have already made this leap and benefit from centralized solutions. From call centers that integrate AI to automated marketing to compliance and collections that are seamlessly managed—centralizing these functions reduces both risk and operational costs.

One organization leading the charge in this arena is Xtend, which offers shared services to credit unions. According to Liz Winninger, CEO of Xtend, “Our shared services allow credit unions to focus on their members and the member experience versus back-office operations.” This shift reduces the burden of vendor management and strengthens the organizational structure of credit unions. By pooling resources, credit unions gain access to state-of-the-art technology services that might otherwise be out of reach.

The beauty of centralized back-office functions lies in their ability to offer personalization while maintaining efficiency. Each credit union retains its unique identity and member-first approach, but it no longer needs to handle the heavy lifting of back-office operations independently. Instead, credit unions can focus on what truly matters—building relationships with their members and delivering exceptional service.

Leave Vendor Management Headaches Behind!

Credit unions have an opportunity to strengthen their operational foundation and enhance member security by adopting centralized back-office functions. It’s a move that offers both financial and operational benefits, ensuring that credit unions remain competitive in a rapidly changing world. So, let’s leave the vendor management headaches behind and embrace a brighter, more secure future.

Ready to learn more?

Attend our next UNDERGROUND Collision on October 26, 2024, and prepare to be THRILLED with the launch of CUSS (Credit Union Shared Services). You will not want to miss this! Register here.

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