Cloud Considerations: Find the Right Outsourcing Partner

Between the constant threats of cyber-attacks and data breaches, members’ rising expectations for a convenient digital experience, and complex compliance and regulatory requirements, it’s no secret credit unions today are juggling many priorities. However, one thing they shouldn’t have to worry about is maintaining the hardware and software necessary for their core processing and digital service solutions, which is a primary reason an increasing number of credit unions are choosing to outsource.

Outsourcing the core and critical IT operations reduces the time and resources credit unions must spend on consistent software and hardware upkeep. Instead of constantly running tests, installing updates and checking code, credit union staff can be liberated to focus on more strategic growth and relationship-building activities. This hosted approach can also often boost security and data integrity.

The Cloud Is Here to Stay

Though some technology trends tend to come and go, the move toward the cloud is a pattern that is here to stay. An increasing number of members no longer think twice about storing photos, videos and important documents in the cloud, as this activity has become second nature. As technology advances, all types of industry leaders are extensively leveraging the cloud via their smartphones or tablets, and, in conjunction with this, have become more comfortable with the cloud as a means for operations and storage. Also, as the ability to transact financial business from the palm of your hand is becoming a way of life, it is a given that this comfort level with the cloud will continue to expand even further into the financial industry space.

Selecting the Right Partner

For credit unions considering a move to the cloud, selecting their outsourcing partner is a huge decision, as not all outsourcing partners are created equal. Credit unions must conduct proper due diligence to ensure they are finding the best fit for their institutions.

When choosing a partner, wise credit unions will assess the potential vendors’ technology road map and infrastructure. By gathering a basic understanding of a vendor’s technology landscape, the credit union will be better equipped to determine if that organization aligns with its own technology strategy and goals.

In today’s challenging security environment, it’s also vital for credit unions to consider potential partners’ business continuity plans, disaster avoidance and recovery capabilities, and security strategies during the decision-making process. The partner’s expertise and competence in this area will have a significant impact to credit unions’ data protection and compliance efforts. Credit unions should also ask detailed questions about how their data will be stored, such as where it will be located, if it will have its own space, and how much control the credit union will be able to maintain over their data and information.

Service is another key area that credit unions should focus on when evaluating potential outsourcing partners. Outsourcing is more successful when credit unions find an organization that functions as a true business partner as opposed to a vendor, someone that engages in consistent, two-way communication and is dedicated to helping the credit union grow and succeed. To investigate a potential organization’s service, credit unions can simply ask their peers. A strong reputation is key in the credit union industry, and credit unions can typically rely on other institutions to provide honest feedback and recommendations.

Thoroughly and meticulously vetting potential partners is essential, as the chosen partner will act as an extension of the credit union. There can be significant consequences for credit unions if a less than optimal partner is selected. For example, if a data breach does occur and members’ sensitive information is compromised, members will ultimately blame the credit union for any risk or harm. Or if certain IT procedures aren’t compliant with industry standards, the credit union is ultimately held responsible. Because of this, it is imperative to select an outsourcing partner that views the relationship as a mutual partnership and has the most appropriate tools, practices and resources for your institution’s needs.

Moving to the cloud can be a great way for credit unions to enhance efficiency, decrease costs and boost security efforts. However, credit unions must be wise about selecting which partner will host their critical IT infrastructure. By making sure the potential outsourcing partner has a solid technology road map, leverages strong disaster avoidance tactics and places a heavy emphasis on communication and service, your credit union will be well-positioned for a successful outsourcing partnership.

Gary Lee is Vice President, Client Relations & Sales for MDT. He can be reached at glee@mdtmi.com.