Should Credit Unions Outsource Their IT Services?

Outsourcing has always played a significant role in the IT strategies of credit unions. However, the advantages of associated with outsourcing for credit unions is greater today than ever before. Especially when it comes to finding a strategic IT partner who can assist and help any internal technology professionals.

Thanks to outsourcing, it is possible for credit unions to find technology specialists to support and help your in-house employee. It also makes it possible to do away with the capital expenditures associated with in-house installations. Outsourcing providers are able to take advantage of scale to allow credit unions to enjoy lower costs along with access to the latest and most sophisticated hardware and software. In today’s age and environment, which is focused on compliance, outsourcing shifts the vast majority of the responsibility of compliance to the provider. This allows credit unions to enjoy disaster recovery, security, and resources for business continuity.

The main advantage of outsourcing is that it allows credit unions to focus on servicing their members without having to think about the hardware and software they’re using to do so. Outsourcing resources that are both scalable and flexible permit credit unions to adequately serve a ballooning membership base without having to invest heavily in new hardware or risk running into capacity restraints.

What Are The Benefits Of Outsourcing IT & Working Together With Internal IT Teams

There are many reasons why credit unions opt to choose to outsource IT as a strategy to support and lend a hand with internal IT resources. Here are a few of the main benefits outsourcing is able to deliver for credit unions in need of IT services.

Operational Expense and Capital Investment

Whenever a recession hits, organizations often worry about the preservation of capital. Outsourcing makes it possible for credit unions to convert IT to an operational expense from a capital overlay. When it comes to in-house processing, many credit unions are prone to investing too heavily in hardware to prepare for future growth and the expected need for flexibility. In contrast, other credit unions are too hesitant to invest and end up facing a saturation point with their current infrastructure. These credit unions are forced to invest in new hardware quickly.

Outsourcing, on the other hand, allows credit unions to contract services and software based on their actual needs. The amount of software and services contracted is scalable based on demand. This allows credit unions to redirect their capital to areas that will lead to a higher return on investment and improved member service.

Scale Your IT Team & Compliment Your Existing IT Department

Outsourcing does not replace your existing IT team, it compliments them.  Bring your credit union access to skills and services and helping overworked IT resources stay on top of user needs.

When a credit union runs their own data center, the opportunities to reduce costs and enjoy the perks of economies of scale are minimal. In contrast, outsourcing providers are able to serve a large number of credit unions and provide processing on a separate and secure environment. This environment is housed on the same hardware or data center for multiple institutions. Outsourcing providers enjoy the economy of scale and a lower cost structure. These advantages are then passed on to credit unions, making it possible for these organizations to reduce operating resources and redirect resources toward the purpose of improving member service, operations, and products.

Sophisticated Technology

Credit unions that manage their technology in-house are responsible for upgrades, installation, and maintenance. This takes up a lot of time, resources, and money. However, when a credit union opts to outsource, the responsibility for most IT processes are shifted to the outsourcing provider in partnership with any internal IT resources your credit union may employee. Most outsourcing providers are able to deploy new systems quickly and efficiently thanks to prebuilt integration. This grants to credit unions access to the most sophisticated technology on the market on a timely basis.


Flexibility is another reason credit unions should outsource their IT services. Outsourcing providers are typically able to deliver software solutions together with internal IT resources more quickly than credit unions can deploy the same software solutions in-house. Therefore, many credit unions are turning to outsource so that they can gain access to new products and services as quickly as possible and help internal IT resources with the management of these deployments.

Core Competencies Focus

Another advantage of outsourcing is that providers tend to have a lot of experience and expertise in functions that would be considered “back-office” for a credit union. Outsourcing allows credit unions to focus on what they do best so that they can please their membership base with the best products and services. For many credit unions, outsourcing is the best way to boost the quality of people working for them. Another advantage of outsourcing is that the risk of losing essential knowledge about systems and software is minimal.

For more information about IT services for credit unions and whether credit unions should outsource their IT services, don’t hesitate to contact us.