Core Conversion Not Challenging Enough? Just Add COVID.

Being the biggest is not necessarily the best. That’s a core lesson Industrial Federal Credit Union ($300.7M, Lafayette, IN) can share as it continues its journey forward with a new core processing platform.

The 30,000-member Hoosier State cooperative converted to a new FLEX platform in March 2021 after running on the same Electronic Record Keeping Services system since 1989.

“We were the largest credit union on our old system, and we’re now in the middle of the pack,” says Kevin Umlauf, Industrial’s president and CEO for the past five years.

His shop is enjoying new abilities to collaborate on innovations with its core provider as well as to use its API to integrate ancillary products from the vendor itself or whatever other provider the credit union should choose.

Although Umlauf had good things to say about Industrial’s previous system, it did not offer integration with third parties.

“We felt this was holding us back from growing,” he says.

Now, members can expect such services as remote deposit capture, mobile wallets, and automatic ACH transactions with other financial institutions, all basic functionalities for credit unions expecting to compete with larger financial services providers.

“Now our goal is to maximize our members’ ability to self-serve through our new digital channels and to streamline processes for in-person transactions” the CEO says.

That streamlining also includes replacing several manual processes that in some cases still relied on paper forms; however, even with streamlining, achieving ROI following a conversion can be elusive.

“Our previous system was very economical from a cost standpoint, and we weren’t expecting an immediate increase in net income with our conversion,” Umlauf says. “We were focused on our ability to grow. Since converting, we’ve had the most rapid asset growth in my 10 years at the credit union. I wouldn’t say that it’s all attributed to the conversion, but I don’t believe our pace of growth would have been the same.”

Going into the conversion, the biggest technical challenge was transferring data from the old system to the new one.

“That was one of my biggest fears going into this,” Umlauf says.

However, the CEO is quick to note his team and his core vendor did a “tremendous job” and allayed those fears.

Of course, the pandemic arrived shortly after Industrial signed its contract with FLEX, which magnified all the challenges the credit union and its core processor would face as it executed a conversion amid the global health crisis.

Not surprisingly, those challenges dwarfed the technical issues.

“We had to pivot our training program to allow for social distancing,” Umlauf recalls. “FLEX had to put more resources into this and create some virtual training sessions. We also had lobby restrictions and people working remotely.”

Although the credit union went out of its way to over-communicate with members about the conversion, there were many who were blindsided.

“This led to a ton of call volume in our call center and long lines in our lobbies,” Umlauf says.

In response, Umlauf says, senior managers “camped out” in the lobbies to help members log into the new digital banking services.

“Once we got members signed into the new system, they were pleased,” he says.

To learn more about the core provider landscape, contact Callahan & Associates and ask how you can gain access to this year’s Market Share Guide: Credit Union Core Processors.