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4 Fundamentals For Evaluating A Core Processor

Stability, connectivity, functionality, and flexibility are all key to identifying the right long-term solution.

If you’re seeking something as significant as an entirely new core processing system, you probably already know what you don’t want. Past experience guides your selection of a new platform. You’re looking back in order to move forward.

Usually a decision to make this step is based on one or more of the following reasons:

  1. Your legacy system can’t support the new products and services you need, leaving an inability to respond to opportunities in the marketplace.
  2. You’ve outgrown the capacity of your current platform.
  3. The limitations of your core processing system are making regulatory compliance more diffi cult.
  4. Your system is a bottleneck, causing ineffi ciencies, wasted staff time, and lessthanideal member service.
  5. Your platform is too costly to maintain.

If I were to add a sixth reason, it would be poor service.

Naturally, you want to avoid these scenarios with your next processing system. You’ll want your next vendor to be a stable and secure partner with solid standing in the industry. It should have a history of keeping up with technological and regulatory demands of the marketplace. A vendor should have resources for research and development that leads to innovation.

You’ll also want a modern system with open architecture, a lower cost of ownership, and the capability to offer all the services you want to provide. An integrated solution suite from the new vendor would be helpful, enabling a reduction in third-party vendor relationships. If you do go to another company for a product you need, easy communication between that software and your new core is required. These are some of the lessons from the past.

Focus On The Essentials

Looking forward, there are four subject areas that can help focus your selection: stability, connectivity, functionality, and fl exibility.

#1. Stability

When shopping for a core, you want a processing system that is rock solid and timetested. Users and vendors may develop applications that surround it and communicate with it, but the system itself should have a history and reputation for stability.

As mentioned above, a fi nancially strong vendor is part of that stability, because such vendors are more likely to deliver on promises regarding technology upgrades, new solutions, and regulatory compliance.

Look for solid proof that your new system maintains data integrity and does not cause work interruptions. When speaking with current users of the core processing system in question, stories of “fl akey” behavior and downtime should be rare. Ask the credit unions using the system you’re considering if they have the ability to scale up or down without worry.

If there are questions or issues with the system, users deserve rapid and comprehensive technical support. This is another key to stability. A technical problem should be a bump in the road, not a showstopper. A good support team will resolve your issues promptly and keep you in business.

#2: Connectivity

How easily can the core processing system connect with third-party software? You want to introduce new products and services, choosing among the best solutions, and using those that fi t your particular needs. The last thing you want is ongoing problems trying to integrate these services with your core, or worse, an outright inability to connect them.

Learn how easily your prospective core solution can perform rapid interactive data exchanges with third-party applications. Does it require time-intensive programming using arcane tools, or are industry-standard, modern programming languages used? How closely does the vendor work with third-party application companies to enhance integration?

These are not minor questions. From linking to a cash recycler to channeling information into a data warehouse for trending and analysis, the issue of connectivity is a critical one. If you want to build your own process or application, or if you want to pull data from various locations, you need the ability to make that happen without a massive IT effort.

#3: Functionality

The functionality of the core processing system is the extent to which it gets the job done and contributes to operational effi ciency. Ask current users of the system how the effi ciency ratio has changed since conversion. Another important subject to investigate is whether there is an outsourced/cloud-based option, and if there is, is the outsourced service identical to in-house, and how well is it supported?

If you find a core processing system that can meet your needs today, consider whether it will continue to be adequate in five or 10 years. Look at how often a vendor upgrades its core system to add new features, to include new technologies, and to make it a more open, flexible platform.

Another factor is integrated complementary products applications that add capabilities to the core. Typical integrated products to look for include a member management solution, virtualization tools, online banking, workflow automation, an IVR solution, remote deposit, image capture, and payments. A second tier of vital products includes document management, lending tools, disaster recovery systems, and cross-selling tools.

If you find a core processing system that can meet your needs today, consider whether it will continue to be adequate in five or 10 years. Look at how often a vendor upgrades its core system to add new features, to include new technologies, and to make it a more open, flexible platform.

#4: Flexibility

You want a platform that enables you to do business the way you want to, not one that restricts your options and dictates how you must do business. An open, service-oriented architecture is best. There is not a one-size-fits-all, pre-configured system that’s going to meet all the requirements of any one credit union. For that reason, these features are essential:

  • The interface used to access core data (windows, toolbars, and so on) should be adaptable to different user configurations.
  • System workflows should be customizable.
  • Your IT department should be able to tailor the functions of the core by designing screens, modifying or creating new processes, gathering data from differing sources, or creating entirely new tools if desired (note a strong user community that shares customized solutions is a good sign of a flexible system).
  • The hardware platform that runs your core system must be easily scalable.

A Complete Investigation

Be sure to speak with credit unions that currently use the platforms you are considering. No matter how much you’ve delved into the technological considerations of a conversion, direct conversations with a user are indispensable. In our white paper, Fresh Starts: How to Pull Off a Dynamite DP Conversion, we recommend the following:

  • Request a complete customer list from the vendor.
  • If possible, visit at least three different credit unions for each core processing system you are considering.
  • Bring a well-rounded and knowledgeable team with you.
  • Validate the things you already know about the system.
  • Learn any new information that might be available.
  • Observe the relationship between the employees and the vendor.
  • Make random calls to credit unions that you didn’t visit.

With each call and visit, focus questions on the fundamentals of stability, connectivity, functionality, and flexibility. They won’t steer you wrong. If you find the right fit, your next core conversion could be the last one you need to make.

Author Bio

Ted Bilke came to Symitar in 2005, as the general manager of Episys Operations and Development, with over 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 (LMSO). 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.

Symitar, a division of Jack Henry Associates (NASDAQ: JKHY), is the recognized leader in core data processing and ancillary technology solutions for U.S. credit unions. Founded as a private company in 1984, Symitar built its reputation by combining robust, flexible technology products with customer service levels that are unmatched in the industry. Its Episyscore platform became the data processing system of choice for progressive credit unions of all sizes, including many of the largest in the country. The company currently has as clients more billion-dollar credit unions than any other provider in the country.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
December 7, 2015

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