By Richard Miller, Executive Vice President-Sales
This Fourth of July, while we celebrate the freedom from foreign rule and our independence as a nation, it’s also the perfect time to reflect on the countless other rights and freedoms we have in America. The freedom to express our opinions. The right to vote. The freedom to speak any language we want. The freedom to order almost anything from the Internet at 3 a.m. Yes, we truly are the land of the free.
In the business and financial realm, we celebrate freedom of enterprise and capitalism. And thanks to our free market economy, we can hire niche experts to deliver measurable results while we focus on our core strengths and skills. Outsourcing is a freedom, and it’s becoming increasingly valuable to businesses in every industry.
Businesses Embrace Their Freedoms
When a skills gap exists, outsourcing a process or service to a third-party can be both wise and profitable. Statistics abound showing that businesses realize the advantages of outsourcing. A few recent examples include:
- According to a recent Clutch survey, 52% of small businesses will outsource business processes in 2019.
- The most commonly outsourced tasks by small businesses are accounting (21%), IT services (20%) and digital marketing (20%).
- Learning House reports that 40% of employers plan to outsource to vendors instead of hiring or upskilling new employees.
Seeking help from an outside source, whether it’s an individual freelancer or an industry-renowned agency, is a freedom in and of itself; but doing so provides you with a number of freedoms to enjoy, as well:
- Freedom from worry. Handing a big project or process over to an expert with a proven track record of success takes an immense amount of stress, worry and concern off your shoulders.
- Freedom to step away. Whether you’re “away” on vacation or “away” attending to other projects and tasks, outsourcing gives you the power to delegate and leave the micromanaging to someone else.
- Freedom from risk. When trusting an outside vendor with an important task or process, it’s essential that they work with your best interests at heart. One way to ensure this is to engage with vendors who offer contingency-based fee structures, meaning their fees are based on the results they obtain for you. In these scenarios, you have next to nothing to lose, but a whole lot to gain.
In the case of overdraft programs, many banks and credit unions will first attempt to do it themselves, only to find that managing the program without guidance and expertise is time consuming and downright risky. They may also consider using algorithm-based overdraft programs with varying limits, but that only leaves them open to compliance issues, account holder confusion and employee dissatisfaction. It’s only once they find a partner that can provide a fully transparent, 100% compliant overdraft program with comprehensive consulting that protects and strengthens revenue year after year that they realize how freeing it really is to outsource this entire system to an expert.
With a program like this in place that also offers ongoing monitoring and maintenance, your financial institution is free to focus on account growth and providing top-notch service. Plus, with the additional revenue generated through the overdraft program, you can implement more services and programs to keep account holders happy and loyal.
Don’t Forget Third-Party Contract Negotiations
One area of outsourcing that many banks and credit unions may overlook is vendor contract negotiations. An expert contract negotiator can take dense, confusing contracts—like core data processing, debit and credit card processing, card brand agreements and more—and comb through them line item by line item to find five- or often six-digit annual savings.
Imagine the freedom of not only avoiding the runaround from vendors, but also not having to immerse yourself in the complex world of service provider contracts. A third-party negotiator with an impeccable industry track record will know exactly what concessions to ask for and how aggressive to negotiate, because they know the vendors and what other banks and credit unions pay for those services.
On top of all that, you’re free to use that extra “found” money to implement improvements and services that otherwise would have been out of reach.
Start Thinking about Freedom Differently
Independence Day is a great reminder that our freedoms, both large and small, are only beneficial if we exercise them.
“Your freedom is the most valuable asset you own,
but just like any other asset,
the less you use it, the less it can do for you.
The good news is you can’t use it up or wear it out.
The more you use, the more you get!”
*From Riskology blogger Tyler Tervooren
So next time you start hitting a pain point in one of your programs, finding yourself too busy to tackle an important project, or just lacking expertise in a certain area, reach out to an expert for help. The freedom you’ll achieve by doing so could be priceless.
ABOUT JOHN M. FLOYD & ASSOCIATES (JMFA)
JMFA is one of the most trusted names in the industry. Whether it’s recovering lost revenue, uncovering new savings with vendor contract negotiations, creating more value, serving account holders better or delivering a 100% compliant overdraft service—JMFA can help you deliver measurable results with proven solutions. To learn more, please contact your local representative or call us at (800) 809-2307.