Successful Conversion to a New Host System Requires Evaluation and Planning

A host system conversion is one of the events most dreaded by a credit union’s senior management team. But according to Callahan & Associates, more than 2 percent of the nation’s 9,500 credit unions are either planning to or have already begun a core system conversion … and the trend continues despite its impact on cost and human resources.

 

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A host system conversion is one of the events most dreaded by a credit union’s senior management team. But according to Callahan & Associates, more than 2 percent of the nation’s 9,500 credit unions are either planning to or have already begun a core system conversion … and the trend continues despite its impact on cost and human resources.

Several factors are driving this trend, including system limitations. In some cases, credit unions are dependant upon the host system provider to add new functionality before the credit union can offer new products and services to its members. Many credit unions also struggle with accessing and using the valuable data stored within their host system. And integrating data with other applications and services can be a daunting task.

The desire to offer business services to members is driving some credit unions to evaluate their core system capabilities. The disparity between supporting the needs of individual members and those of business accounts quickly shows the limitations of some core processors. In order to serve businesses, a core system must be able to support cash management services, merchant credit card processing and advanced reconciliation.

Due to the time and expense posed by a core system conversion, some credit unions are integrating third-party middleware solutions with their existing host processing system in order to gain additional functionality and eliminate the need for a host conversion.

Because of the need to remain competitive, credit unions constantly look for options that will enable them to continue to provide robust offerings while managing costs. If a credit union is considering a host conversion, there are several key questions it should consider:

What needs are not being met by the credit union’s current core system and can these needs be met through a third-party provider?
Patelco Credit Union was challenged by a core system interface that required its Member Service Representatives (MSR) to access more than five screens of information to find key member data. According to John Shields, senior vice president of eBusiness, “When a member called in with a question, it took significant time for the MSR to locate the needed information. This process was not only time intensive for the member, but also increased training times for new MSRs.” Patelco shortened their average call time and increased productivity by using Corporate Network eCom’s (eCom) MemberBridge® solution. Shields added, “Using MemberBridge, Patelco was able to develop a customized Web-based solution which consolidated all of the important information into only a few key screens. The new interface resulted in higher member satisfaction because MSRs were able to assist members more quickly and easily.”

What are the features and benefits of the credit union’s current system?
It is important to evaluate the current system and identify all critical features and benefits, whether direct or indirect. For instance, does the credit union’s current core provider have an open architecture that provides access to key information? What types of member support tools does the system provide that are integral to the credit union’s current day-to-day operations? Understanding the current system’s data access and customer support tools is important so that critical functionality is not overlooked when comparing alternatives.

What benefit is the credit union hoping to achieve in undergoing a conversion?
Credit unions should clearly define requirements prior to beginning vendor selection. Representatives from critical areas of the credit union should be included to ensure that the final solution meets the organization’s needs. The credit union also should consider whether the requirements will be met by the core processor alone, or whether a third-party integration tool could provide some of the components. The new core system should be flexible, adaptable and scalable to grow with the credit union’s needs. The final selection is more likely to meet the credit union’s needs if requirements are clearly defined up front.

What can the credit union do to help ease the conversion impact on its members?
Internet-based services such as online banking and bill pay, electronic statements and online communication tools are some of the most important representations a credit union has with its members. Maintaining a consistent user interface during a core system conversion enables the member to continue using these services with little or no inconvenience. Credit unions can achieve a uniform presence through the use of independent Web-based delivery solutions, such as MemberBridge, which are not tied to a particular host processing system. By using MemberBridge, several credit unions have preserved the user interface and Web presentation while undergoing a host processing conversion.

Because of the importance of the core processing system to a credit union, selecting the right vendor is essential to remaining competitive and providing quality offerings to members. For more information on MemberBridge, please contact Cheryl Harris, national sales director, at (888) 656-4050, ext. 6027 or visit www.memberstreet.com.

 

June 7, 2004


Comments

 
 
 
  • great stuff
    Anonymous
     
     
     
  • Great commercial for MemberBridge. An honest article with more than one product featured (or not product mention at all) would have been of more use.
    Anonymous
     
     
     
  • Information was nothing new. Seemed more like a paid advertisment for MemberBridge than any helpful pre-conversion planning information.
    Anonymous
     
     
     
  • great stuff
    Anonymous
     
     
     
  • Very interesting
    Anonymous
     
     
     
 
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