It’s understandable that a credit union would be skeptical about making a core conversion decision. It should be skeptical. It’s a big investment, and the process involves the time and effort of every single staff member. There need to be solid reasons to undertake such a project.
Some credit unions have obvious core-related deficits. Others might feel they’re getting along just fine with their current core system, with minor obstacles. However, they take a risk by staying the course. Simply remaining as you are can be more expensive than moving. The key is knowing when not upgrading to a more efficient and flexible core system is going to cost more than a conversion.
Small Bumps Can Grow Into Mountains
Credit unions looking to move ahead, to boost service, and to increase profitability are probably seeing clues that a change will be needed down the road.
They are finding:
Frustrations from the lack of automated workflows, a nonintuitive interface, and the lack of quick access to information about the system and operations in general.
Having to wait for a vendor to produce a product that meets their needs.
Difficulties and high costs encountered when integrating third-party products and services.
The inability to differentiate products and services from others in the marketplace.
If issues like these are annoyances now, but not showstoppers, do you expect that they will be significant problems in the future? If so, it might make sense to convert before you grow into future bottlenecks. It’s cheaper and easier to deal with problems when thinking ahead rather than reacting to a crisis.
Looking To The Future
It’s hard to be sure exactly where member needs are going to be in several years. That makes it all the more comforting to have a core provider with a wide range of ready-made integrated products and services for members and businesses. For most, a conversion to a vendor like this pays off in the long run.
As mentioned earlier, one of the risks a credit union runs is lack of open connectivity. The future is wide open for institutions that can take advantage of new technologies.
For example, we can reasonably predict that members will one day be interacting with products like the Amazon Echo and the Apple Watch to carry out banking transactions. To accommodate this, a credit union will need a core system that enables communication and interaction with data from these systems.
A thriving core processor vendor will have the research and development clout to keep up with the times. You don’t want to be the one who’s left watching and waiting as other credit unions provide capabilities their members are asking for.
The importance of flexibility and customization can’t be overemphasized. If a credit union needs a quick time-to-market solution and the product isn’t available yet, the credit union ought to be able to craft one with industry-standard tools. At Symitar, you might even find a credit union-made solution on our user-contribution marketplace. It’s this ability to customize that makes it easy for a credit union to brand and differentiate its offerings.
Setting A Course
“If it’s not broken, why fix it?” is a good philosophy, but only up to a point. The upshot of these considerations is this: If you think you’ll need to upgrade your core in the future, it might be less trouble and cost to do it today.
Take an unbiased look at trends in the marketplace and the capabilities of your current system. No one wants to find themselves saying, “I wish I had upgraded a few years ago.”
Ted Bilke came to Symitar in 2005, as the general manager of Episys Operations and Development, with more than 20 years of technology and financial services experience. He began his career with EDS, where he worked for 12 years. After EDS, he served as director of LAN Management Services for MCI Systemhouse, vice president of Integration Services for Bell & Howell, COO for Ascendant Solutions, and vice president of Lockheed Martin Space Operations. He holds a BSBA degree with a double-major in finance and marketing from Missouri Southern State University. Five years after coming to Symitar, he was appointed president.