Is it time for credit unions to re-evaluate the benefits of outsourcing?

7 minute read, posted on 03/02/2023, by VXI Marketing

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For credit unions, the word “outsourcing” has historically evoked feelings of angst and knee-jerk reactions, especially when used in conjunction with the member experience. More often than not, this can be traced back to legacy operating models and preconceived notions that outsourcing erodes service quality.

In reality, smart outsourcing has proven the opposite. Sure, like any industry there are good and bad partnerships, but if you look at the top five banks by customer satisfaction scores, you’ll notice a trend. They are all seasoned outsourcers. In fact, these strategic partnerships have become much more than a cost play. Today, business process outsourcers (BPOs) are working with leading financial service providers to successfully design, launch, and manage digital-first solutions within the contact center.

It’s no secret credit unions continue to lose ground to the big banks. A recent study by the American Customer Satisfaction Index showed credit unions trailing behind by three percentage points or more on nearly every single service category rated by U.S. consumers.

When you combine that fact with a challenging economic environment, thinning margins, and rapid technology advancements, an important question comes to mind. Is it time for credit unions to reconsider the benefits of outsourcing?

Most organizations would agree – outsourcing in today’s operating climate makes sense. With the market forecasted to grow to $513 billion by 2023, it’s clear businesses need more help than ever when it comes to staying agile and responsive to customer needs. What was once deemed a necessary evil is now considered imperative for companies to leapfrog the competition. In fact, 78% of companies that outsource their work globally, view their partnerships positively.

Below are a few of the top benefits and use cases that member experience leaders should consider when assessing how capability outsourcing can fit into the larger member service framework.

  • Improved service delivery and process standardization for members

For brands who are new, or inexperienced outsourcers, starting with your lower-value, higher-volume member touchpoints and channels will result in a faster speed-to-value. These are often the contact types that are bogging down the customer care queues or back-office workflows, creating process bottlenecks and lower rates of first contact resolution. For financial service providers, this can range from basic account management to general service inquiries, loan processing support, and payment solutions. These are also service areas of the business that are easily standardized, allowing BPOs to implement robust training, quality, and workforce management solutions to achieve service consistency. Digital channels like chat and messaging are also ideal starting points for brands who want to keep their voice support in-house.

It’s not uncommon for BPOs to provide a higher level of operational excellence once established, especially in comparison to internal contact centers challenged by thinly stretched teams and competing priorities. Through these partnerships, brands also benefit from access to cross-industry best practices and years of experience catering to a wide array of diverse customer demographics. Credit unions can leverage this expertise to help solution for a younger generation, operationalizing personas within the contact center to navigate the different service needs and banking requirements of current and future members.

  • A renewed focus on core competencies

By strategically selecting and offloading the contact types and channels that CX outsourcers excel at, credit unions can focus more time on their core business functions. Low-impact, ancillary business activities suck up resources that can be better spent on higher-value member services like onboarding, financial coaching, and product education.

For this reason, customer support outsourcing has become one of the most sought-after services for enhancing market value. Experienced BPOs can help credit unions avoid many of the common pitfalls companies fall into when launching new channels and service types for the first time. As a result, employees remain focused on their core responsibilities, members are kept happy, and the entire organization functions as a well-oiled machine.

  • Access to larger talent pools and specialized skillsets

Even before the pandemic and the Great Resignation, U.S. companies were struggling to address the gap in labor supply and demand. To source in today’s competitive labor market, companies are having to stretch their operating budgets, spending more on recruitment, compensation, and training to overcome staffing and skill shortages – with no end in sight.

Through global delivery platforms, outsourcers are able to maintain staffing levels, tapping into specialized skillsets and rich talent pools to scale with ease in response to changing market dynamics.

  • Opportunities to test emerging technologies and co-create digital-first solutions

 The best partners take outsourcing a step further, offering consulting services and digital experience capabilities to drive efficiencies and next-level service experiences for members.  From artificial intelligence to robotic process automation, cloud solutions, and content moderation, the right partner is a key stakeholder in your digital transformation initiatives.

Not engaging and securing contact center leadership buy-in can be a huge misstep. It’s why many BPO partners offer experience design, journey mapping, and process re-engineering solutions to help IT leaders and technology vendors co-create digital solutions. Whether launching pilots for emerging technologies, designing the blueprint for the member experience, or taking the lead on measuring ROI and mining the contact center for insights, BPO providers are advocates for value creation.

  • Cost containment and efficiency gains

Another benefit of outsourcing that can’t be ignored is cost optimization. Running a contact center requires a significant investment in real estate, technology, equipment, and talent. Business process outsourcers can disperse these costs across programs, allowing the brand partner to only pay for what’s required on a transactional or per-hour basis.

Managing production costs and overhead expenses is key for credit unions and local lenders, as every dollar spent must return the greatest possible benefit for members. Through a roundtable study, McKinsey & Company showed that credit unions were systematically more inefficient compared to banks of comparable size due to the lack of cost containment practices in place. By outsourcing, credit unions can free up a larger percentage of funding for more critical transformational initiatives and capital investments.

  • Mature data security and privacy standards for an evolving workforce

Many credit unions fear that working with a third-party outsourcer could put their data at risk. And while data security is a serious concern for all contact centers – in-house or outsourced, many BPOs have made investing in Infosec and safeguarding the brand reputation a core competency. From maintaining the highest levels of industry certifications to implementing zero-trust security postures, outsourcers have become adept at providing proactive risk mitigation and rigorous security controls to alleviate these concerns.

When it comes to deploying a virtual workforce platform, BPOs are even further ahead in their security practices than most companies today. As pioneers of work-from-home solutions, industry-leading outsourcers can help credit unions deploy secure hybrid models to attract top talent domestically.

From biometrics and role-based access to cutting-edge software solutions and authentication systems, outsourced contact centers go to great lengths to ensure data integrity and privacy.

Interested in learning more?

The right outsourced partnership can provide credit unions with the operational expertise and support needed to compete at scale. Credit union leaders who have discounted outsourcing in the past should consider taking a second look. And while outsourcing can’t solve for every challenge, many providers may be pleasantly surprised to find that the range and quality of outsourced services available today will meet, if not exceed their in-house capabilities.

About VXI Global Solutions

VXI Global Solutions is a BPO leader in customer service, customer experience, and digital solutions. Founded in 1998, the company has 40,000+ employees at more than 40 locations in North America, Asia, Europe, and the Caribbean. VXI delivers omnichannel and multilingual support, software development, quality assurance, and CX advisory, automation & process excellence to the world’s most respected brands.

VXI is backed by private equity investor Bain Capital and is one of the fastest growing, privately held business services organizations in the United States and the Philippines, and one of the few US-based customer-care organizations in China.

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