I hear too many credit union CEOs wonder how to survive. I offer an alternative vision for what is possible for your credit union: Thriving.
And I assert that any credit union from $20 million to $200 million in assets must be using a Managed Services Provider in order to thrive.
Think this is a bold statement? Perhaps it is. Let’s look at the facts before you decide.
Small to small/mid credit unions are faced with managing a level of IT complexity that no other business of the same size must manage (other than, perhaps, health care). The complexity is created because of five requirements:
- Third party relationships (e.g., ATMs, Shared Branching, Home Banking, Core Processing, Fedline)
- Disaster Recovery
- Infrastructure Operations
No small to small/mid credit union can effectively manage IT through in-house staff alone. Staying focused on driving member value is critical. Diverting the IT department to review and maintain “plumbing systems” when they could be reviewing, implementing, and evaluating systems that enhance the value of the credit union in the eyes of the members–that is where IT has to be focused. Resource coverage in the areas mentioned above is too challenging, and too risky to try with only in-house staff.
In the IT space, a step that supports thriving is outsourcing your IT operations. Hire a Managed Service Provider (MSP) who can handle all the blocking and tackling of the five items I listed above.
I have noticed that a credit union that has reached over $100 million in assets typically has one person on the IT staff who is smart and capable. Without an MSP in place, this person invariably ends up trying to do everything. Rather than tying up this valuable resource on housekeeping chores, have your MSP report monthly to this person. Require that the reporting be compliance based in nature and not all technical; if this is not required then you are still saddling your key IT Manager with the burden of producing the proof needed each month.
I can’t stress this point enough: Shift your key manager’s focus to member-facing projects and have the MSP deliver the rest. This will put the company on the road to thriving and, from a professional growth perspective, it places your “shining star” IT employee in a position of managing the plumbing versus doing the plumbing, which should be a welcome step up for any bright, ambitious manager.