2 Journeys To A New Core Provider

How two credit unions found truth and happiness in their search for a new core processing partner.

 
 

Every journey begins with one small step. In the case of picking a new core processor, it’s one big document.

CU QUICK FACTS

AltaOne FCU
Data as of 09.30.17

HQ: Ridgecrest, CA
ASSETS: $636.0M
MEMBERS: 53,734
BRANCHES: 11
12-MO SHARE GROWTH: -1.7%
12-MO LOAN GROWTH: -2.9%
ROA: 0.35%

When credit unions are looking for a new provider of crucial infrastructure, they typically send a request for proposal (RFP). The RFP is just one part of a larger process that pushes a credit union to think deeply about strategy and tactics, the path ahead, and what will serve the best interest of the member-owners.

Selecting a new core processor is a weighty decision for credit union management teams. The choice isn’t just about functionality or bits and bytes, it’s about providing services that define the credit union and determine its future.

All cores provide the basics, but after that, there’s a wide array of considerations around integrating or buying built-in digital services like mobile banking and RDC, about technical support, about training and timing.

CU QUICK FACTS

Andigo Credit Union
Data as of 09.30.17

HQ: Schaumburg, IL
ASSETS: $873.1M
MEMBERS: 35,163
BRANCHES: 6
12-MO SHARE GROWTH: -3.6%
12-MO LOAN GROWTH: 13.9%
ROA: 0.33%

It goes beyond cost and seeps into culture. The depth and breadth of the credit union-core processor relationship is unmatched. And choosing a new one is rarely an easy feat.

In 2015, Andigo Credit Union ($873.1M, Schaumburg, IL) simultaneously changed charters, expanded its FOM, changed names, and built a new headquarters and a new remote data center. It was an ambitious undertaking, and the former Motorola Employees Credit Union knew it needed a flexible, scalable, adaptable core system to meet its new vision for the future.

Andigo had been with the same core provider since 2001. So, the first step the credit union took was to clarify what, exactly, it was looking for in a new core.

Sean Bowers, EVP/CIO, Andigo Credit Union

“We needed a comprehensive, member-centric view with enhanced contact and relationship management to support our culture of cross-selling,” says Sean Bowers, executive vice president and chief information officer at Andigo. “Plus, business lending and deposit products.”

AltaOne Federal Credit Union ($636.0M, Ridgecrest, CA) began its search for a new core processing partner approximately one year earlier than Andigo. Although AltaOne didn’t change names and places as well as technology, it still had some ambitious goals of its own.

Wendy Cleveland, SVP/COO, AltaOne FCU

“Our core didn’t support our growth needs,” says Wendy Cleveland, AltaOne’s senior vice president and chief operating officer. “It didn’t give us the flexibility we needed for integration and new product development.”

At the same time, the credit union wanted to convert all its digital channels, a strategic opportunity it had been discussing for more than 10 years. So, AltaOne undertook a parallel RFP process.

“We opted to convert our digital channels before the core to minimize the scope of member and employee impact,” Cleveland says.

Still, there was plenty of scope with online, mobile, bill pay, and P2P solutions from three different suppliers going live in October 2016, nine months before the new core from yet a fourth enterprise.

That kind of integration requires in-house planning to ensure third parties are up to the challenge. And that means due diligence and a good map.

Andigo Credit Union started its conversion journey with Callahan & Associations. Using the Market Share Guide: Credit Union Core Processors and Peer-to-Peer, Andigo identified 38 platforms serving 3,500 credit unions, then filtered that list to cores serving credit unions of $1 billion or more in assets. Learn more at Callahan.com/Core.

RFPs And Due Diligence

After a full-scale needs assessment, each credit union worked with a consultant to develop a request for proposal (RFP), which then served as the map for much of the journey ahead.

4 For Core Conversions

Wendy Cleveland, SVP/COO at AltaOne FCU, says four things in particular helped her credit union undertake a technology transformation.

  • Start early. There are many “unknowns” along the way, and the process sometimes requires custom programs or a change in third-party systems to make something work as the credit union planned.
  • Have fun. A committee at AltaOne engaged all employees through fun activities and newsletter updates.
  • Budget more. Make sure there’s enough in the contingency fund for additional overtime and inter-office travel and food.
  • Clean up. Do as much front-end data work as possible. It’s painful, ugly, and essential. And expect more post-conversion.

Three core processing platforms responded to Andigo. The credit union requested a demonstration from two. Department managers and subject matter experts hosted visits from promising platforms as well as paid on-site visits to other clients.

“We determined strengths, weaknesses, and gaps, and then went back to the core processors to identify how they could fill those gaps,” Bowers says. “Then we did deeper dive demos. We got hands-on, so our people could touch the system.”

The process took 12 months and 2,800 total staff hours.

AltaOne also went through multiple demonstrations, phone calls, and visits to core vendors’ headquarters and client credit unions. With an eye toward integration ease, that included a trip to the eventual winner’s imaging center to see how a teller capture solution worked in real life. The credit union then selected two finalists and asked for more demos.

“We had all the critical stakeholders on the team and each area’s perspective was critical in the final vote to select the winner,” Cleveland says.

Andigo Credit Union went live on the Fiserv DNA platform in October 2017. AltaOne Federal Credit Union went live with Symitar Episys in July 2017. Both used Next Step consultants during the process. Find your next partner with Callahan Buyer’s Guide.

Senior management and board buy-in obtained, it was time to get down to brass tacks.

We determined strengths, weaknesses, and gaps, and then went back to the core processors to identify how they could fill those gaps.

Sean Bowers, EVP/CIO, Andigo Credit Union

Contractually Speaking

Negotiating the contract is a critical piece of the conversion pie. And although negotiations can be delicate — with considerations for long-term and short-term costs as well as performance standards — they also set expectations for what needs to be a productive working relationship.

An attorney and core consultant handled the contract at AltaOne, but they had support.

“Our three-person executive team was at the table for immediate decision-making,” Cleveland says.

For Andigo, outside of a few red lines, solidifying the contract was similar to any other price negotiation, according to Bowers.

“Cost was important but was not a decision-making criterion,” he says. “This was a long-term decision. It was imperative that we find the best strategic partner.”

The 2018 Core Report

Callahan's Supplier Market Share Guide: Credit Union Core Processors helps leaders fully understand the performance and strengths of core processors in the credit union space. This guide offers:

  • Expert opinion and advice.
  • Changes in market share.
  • Client performance comparisons.
  • Aggregate assets for credit union clients.
  • Newly acquired clients and integration information for select platforms.

Contact Callahan to order your copy today.

Contact Us

The Final Stop. Except It Isn’t.

After the ink dries, the real fun starts. Converting to a new core processor is a notoriously complex endeavor that calls for teamwork and cooperation from the front line through the C-suite and on to the multiple suppliers involved.

Cleveland says the conversion went smoothly at her California credit union, and it’s continuing to build on to the system and add functionalities.

A month after Andigo went live with its new core, technologists and business users at the Illinois credit union were immersed in building workflow improvements using their new activity and document management solutions.

“The journey never ends,” Bowers says.

 

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Dec. 4, 2017


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