The VoIP Opportunity: Is Your Credit Union Ready?

Voice over IP appears to many to be the next step in communication technology. Is your credit union on the right track?

 
 

No one will argue that the rapid adoption and impact of Voice over Internet Protocol (VoIP), the transmission of digital voice communication packaged as data over existing internet infrastructures, has been anything less than astonishing. Akin to the low-carb diets popular of late, VoIP has spread at a feverish pace in the last two years, as anyone with even the slightest relation to communication networks is scrambling to be a leader in this emerging industry: telephone conglomerates, cable companies, communications regulators, even the United States Congress.

According to Michael Powell, the current chairman at the FCC, VoIP is “the most important shift in the entire history of modern communications since the invention of the telephone.” While many may contend that the technology may not be mature enough, Voice over IP has already been implemented at thousands of businesses and in the homes of millions of consumers. And it continues to grow exponentially. According to Frost and Sullivan, San Antonio, a high-technology consulting firm, North American businesses will spend $12 billion on VoIP in 2006, a 600% increase in five years since 2001.

Voice over IP appears to many to be the next step in communication technology. And rightfully so, given the touted benefits. VoIP has the potential to transform the manner in which people around the world communicate daily. Due to the fact that VoIP is based on software, rather than hardware, it can be cheaper to install, easier to maintain, and much more flexible than traditional telephone technologies. Calls are transferred over the same data line as broadband internet, making separate routers and circuit switches obsolete. This also allows users to make use of great new features, such as transferring voice mail messages to your email inbox and allowing easier and faster video and voice conferencing. You can even connect your phone while traveling into any internet connection and have the exact same number as you have at your home or office, without paying long distance charges and roaming rates.

However, the use of Voice over IP requires customers to have at a minimum a broadband or DSL internet connection. In this regard, the future is particularly bright. Currently, approximately 22 million households across America already have such a high-speed internet link. AT&T projects that by the end of 2007, the number of households with broadband internet access will more than double to 47 million. And this number only represents consumers, it does not include the connections of small and large businesses and corporations, for which broadband or better is almost a certifiable necessity.

Many credit unions of varying asset sizes and situations have recently taken advantage of the opportunity to develop a VoIP solution of their own. As these institutions continue to expand and streamline operations, the countless advantages and possibilities of internet telephony to lower costs and improve proceduresbecome too good to ignore. Some benefits include:

  • Substantial cost savings and ROI benefits
  • Higher staff efficiency through lower training costs, better inter-branch communication
  • Increased disaster recovery options
  • Diminished IT support costs
  • Simplified and reduced-cost expansion of branch offices
  • Enhanced custom capabilities through core system integration

Additionally, a recent 2005 technology spending survey of credit unions conducted by Callahan & Associates revealed a strong interest in VoIP adoption. The credit unions see opportunities not just for sizable cost savings through the replacement of present telephone systems, but also in terms of convenience. One recently interviewed credit union insisted simply the convenience of simplifying inter-branch communication makes the investment worthwhile, regardless of the cost savings and improved disaster recovery plans achieved. Somewhat surprising, but not unexpected, VoIP has proven to be not just for large credit unions with many branches. Many small organizations are realizing the rewards of the lower equipment costs due to less hardware. Small companies who adopt Voice over IP are also perfectly prepared for growth, as VoIP is easily adaptable to growing networks. All in all, VoIP is a unique opportunity for any and all who want added phone features, lower costs, and improved growth readiness.

It all adds up to one thing: Voice over IP is here to stay. With the number of VoIP access lines in the US expected to triple and surpass 19 million by 2007 (Telecommunications Industry Association), businesses must at least consider this technology as a viable and arguably unavoidable alternative to existing phone services. Further, the current drive in the FCC and Congress toward the deregulation of Voice over IP leaves little doubt this will be the most important communication development for years to come. Industry experts agree: it is clear you no longer have to ask if VoIP is right for your organization. You just have to decide when the opportunity makes the most sense.

 

 

 

July 26, 2004


Comments

 
 
 
  • very well written
    Anonymous