Single suite or best of breed?
The great divide in core processing, Berdan says, is single suite versus best-of- breed solutions.
“Can a core processing provider put together a range of capabilities— marketing customer information file system, lending, channel management, payments, content management—in one suite versus blending, interfacing, and managing several different systems? When I was in the banking industry, we had 28 separate systems for addressing all those different functions,” he says.
“Credit unions traditionally have been best-of-breed buyers and users,” Berdan adds. “However, now with consumers doing so much via mobile and voice, all self-service channels have to look, respond, and update the same. Consumers expect the same experience throughout the enterprise.”
Providing this consistent, seamless experience through multiple vendors can present great maintenance and upgrading difficulties, Berdan says.
“There’s simply a lack of bench talent among most credit unions to be able to efficiently and effectively manage multiple systems,” he says.
Bilke agrees there can be benefits to having a single supplier. “It’s what we sometimes call ‘one throat to choke,’ ” he says. “A single supplier has to take ownership for things that go wrong.”
But, he adds, credit unions want things the way they want them, “and that oft en means getting something from us and something from somebody else.”
Bilke says Symitar addresses that demand through its Vendor Integration Program (VIP) which relieves credit unions from having to reconcile different systems.
“Through VIP,” he says, “we deal with more than 60 other vendors, testing their systems and ours in different configurations and levels of development—from first stage to beta to finished—to make sure they work together efficiently.”
The quest for continuity
Continuity solutions have become a hot trend as well, Bilke notes.
“The quest is on for genuine 24/7/365 capabilities so call centers are always staff ed or members can start a car loan application at 2 a.m. and get it processed right away,” he says.
The pursuit of enterprise-wide encrypted security solutions also will become more prominent in coming months, Bilke adds. “This involves the encryption of everything— reports, images, loan applications— into a common storage system. It makes perfect sense to secure all systems at the same time.”
Auditors have encouraged credit unions to secure all their channels, fueling this push.
“More channels means more risks,” says Bilke. “The bad guys are shifting from attacks on Tier 1 financial institutions to smaller financial institutions in the hope of finding more easily compromised security.”
In the meantime, core processors have responded quickly to consumer pressure for maximum convenience, which increasingly excludes brick-and-mortar branches.
Among the features Share One offers to improve service and broaden credit unions’ appeal to current and potential members, Van Frank says, are:
* Member service via text messaging;
* Instant loan decisioning; and
* Online document transfers that eliminate the need to send physical documents back and forth, or for a member to have to appear in person.
“Next year we’ll introduce ‘tablet branches,’ where our clients will have the capability of going out and recruiting members on the spot via tablet presentations and sign-ups,” Van Frank says.
In the pipeline for Harland Financial Solutions, Berdan says, is an increased focus on:
* Channel integration;
* Compliance. “Five years ago, we were devoting one-third of what we are now to compliance in terms of time and resources,” Berdan says; and
* Payments. Financial institutions are determining how they’ll stay engaged in the payments game: person-to person payments, bill presentment and payment via devices, and mobile acceptance capabilities for merchants.
“We’re focused on keeping credit unions relevant in that arena,” Berdan says.
He warns that as core processing continues to grow in sophistication, credit unions run the risk of falling behind. “If you don’t keep up on new features and functionality, there’s a danger you might not even know what’s in your system.”
There have been cases where clients asked Berdan for a feature that’s already part of the system. “They didn’t learn it well enough to know that,” he says. “In our contract with new clients, we include a ‘contract checkpoint,’ where at six or 12 months we come back to a client to assess how well they’re using our product, whether it’s one part of the suite or the entire system.”
For Van Frank, the whole point of core processing is to make transactions and requests easier for members by responding to them quickly.
“They’ll see you are making life less expensive and more convenient for them. You’re helping members conduct their financial affairs without having to spend a lot of time or be in a particular place to do so.”