Conventional wisdom says a down economy is the time to pull back on capital investment. However, credit unions are using “down time” to reinvigorate their core platforms. In fact, smart credit unions are finding the current recession is the perfect time to convert to a new core system that can position them to capitalize on the eventual economic recovery.
“The way we looked at it is that the economy is slow, so what a perfect time to get our house in order,” says Janet Sanders, President and CEO of Greater New Orleans Federal Credit Union ($102.9M, Metairie, LA). The credit union converted to a Symitar core platform in February 2010.
“We felt we were making an investment in the future,” Sanders says. “Even though our members aren’t borrowing at the rates they had been before the recession, we had a solid capital foundation and we felt we could spend money on a new platform that would position ourselves for future growth and even help us gain market share from banks.”
There are four key drivers in today’s marketplace that make a core conversion particularly viable and valuable.
1. Growth opportunity.
2. Technological necessity.
3. Credit union industry activity.
4. Compliance concerns.
Targeting Core Benefits
The intersection of economic circumstances and market forces has provided a powerful motivation to upgrade core data processing systems. Although necessity may be the driver behind core conversion, credit unions that have implemented a modern processing platform realize business benefits in several key areas, including:
1. Improved efficiency and productivity.
2. Achieving business goals.
3. Reduced costs.
4. Improved customer support.
5. More secure and stable vendor partner.
The ability of modern core platforms to deliver business benefits to credit unions is based on a solid technology foundation. The technological benefits gained through core system replacement fall into four categories.
1. Broader core capabilities and easier third-party integration.
2. Easier configuration and customization.
3. Improved user interface and workflow.
4. Architecture and infrastructure advantages
Capitalize on Opportunity
The experiences of Greater New Orleans FCU — as well as Generations FCU, University of Iowa Community CU, and Jefferson Financial CU — illustrate that the current economic climate is a smart time to make a forward-looking investment in core capabilities.
“A lot of people are afraid to do a conversion. CEOs don’t want to tackle it because it is a large undertaking,” Sanders says. “But with our new core processor, it’s not a difficult process because they [Symitar ]are experts in conversions. They have realistic timetables and can hold your hand through the process. We had utmost confidence in the conversion team.”
Choosing the right platform is important to achieve the maximum benefits from a conversion, and choosing the right partner is essential to ensure the success of the conversion project itself.
“When we implemented our previous core system 12 years ago, we bet on a long shot and paid the price,” says Jeff Disterhoft, CEO of the University of Iowa Community Credit Union ($938.1M, Iowa City, IA). “This time, we wanted to invest in a proven winner.”
Download the complete report, Core Conversion: No Better Time Than Now and learn why now is the time to invest in a new data processor!