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Choices And Considerations For Choosing A Core

How to find your fit when one size doesn’t fit all.

In today’s wired world, credit unions must rely on the support of technology to manage their daily operations, improve member service, make informed business decisions, and keep up with evolving market demands. At the centerpiece of that technology infrastructure is the account processing system, with an ever-increasing amount of data flowing in and out.

When it’s time to choose a core account processing solution, today’s credit union leaders must weigh many factors. Chief among these considerations is the importance of choice. There are more than 7,000 credit unions operating in the United States today and their needs and business requirements are diverse.

Aligning Priorities
The strategic priorities of each individual credit union should be the driving force behind its account processing search criteria. Like credit unions, account processing solutions offer a range of service options. Some vendors attempt to deliver one or two systems to the entire market when in reality the needs of credit union clients can vary widely.

A $20 million credit union doesn’t share the same needs as a $1 billion institution. There are obvious differences in budgets and processing volume. But the considerations don’t end at size or even geographic differences. Two $300 million institutions in the same city with the same size membership can still have distinct business goals as they relate to growth. Perhaps one wants to expand its digital channels, while another wants to focus on growth of a specific target market like non-English speaking members or Gen Y. The right technology plays an integral part in achieving these and many other objectives. Each credit union leader must look at their goals and blend business strategies with account processing requirements.

A Spectrum Of Capabilities
A credit union’s core solution is the primary source for account processing data and it plays an essential role in compliance, lending, and marketing. Even among these core areas, each credit union faces different requirements.

Member identification is one of many examples where the basic functional requirement is shared by all credit unions, but the approach can vary widely in terms of sophistication, cost, and business need. A smaller SEG-based credit union might have no need to capture member signatures and photo IDs electronically, but a community-chartered, urban-based credit union might want to take the extra steps to confirm and maintain member records and guard against identity theft.

For lending, credit unions of all types and sizes must be able to effectively deliver competitive lending products and process loans. But the level of complexity changes from credit union to credit union. One might want a more robust solution with the ability to tailor form packages around individual loan products and customize the workflow according to its own loan origination process. Another might have strategic plans for growth in the small business market and require sophisticated business lending capabilities with separate fee structures, analysis tools, and more.

When it comes to marketing, cross-sell capabilities are paramount in a market where members are bombarded with messages from both traditional and nontraditional competitors. Most credit unions will want to identify an account processing solution that helps them offer the right product to the right member at the right time. For some, simple entry-level cross-sell capabilities will suffice. For others, data mining that delivers credit report data to create truly targeted opportunities might be the best solution to suit their needs. Still others will seek a solution somewhere in between.

A full spectrum of options is available, even for the most basic check boxes in the account processing RFP. Consider not only what functionality the credit union needs but also how robust those tools should be and which areas are most critical to the institution’s strategic business plan.

Integration To Key Services
Account processing selection is no longer solely about the core system itself. An abundance of add-on solutions are necessary to compete in today’s marketplace. When selecting an account processing solution, credit unions should also understand how the core interacts with the other critical systems in their technology toolbox.

As your credit union makes technology choices, the way it interacts with members via digital channels both now and into the future must be a key consideration. Does the account processing system integrate with the tools needed to offer mobile and online solutions with the timely data increasingly wired members expect? Does it interface with market-leading online banking options for the institution’s specific digital needs, whether basic or robust?

Payments are another arena where the game is rapidly changing. Integration with account processing data is critical in a marketplace where members want quick access to their funds with mobile, P2P channels, and other convenient payment options. The account processing solution selected should be able to share data back and forth between payment systems in order to strengthen credit union offerings today and position the institution for the next chapter in payment services.

Choosing A Partner
Ultimately, the selection of an account processing solution is also the selection of a technology partner. When credit unions make their choice, they should seek a provider that not only offers the technology products and services that meet their business requirements but also offers a dependable relationship.

Today’s credit union technology is complex with many moving parts. So consider a provider who can offer one hand to shake but with multiple tools that meet your business requirements. And at the end of the day, select a partner that has the knowledge, stability, and thought leadership necessary to support and guide the credit union for the duration of the contract and well beyond. The choice is yours.

Barb Lowman is Vice President of Business Development for Credit Union Solutions at Fiserv. She can be reached at barb.lowman@fiserv.com.

Fiserv, Inc. (NASDAQ: FISV) is a leading global provider of information management and electronic commerce systems for the financial services industry, providing integrated technology and services that create value and results for our clients. Whether you want to grow deposits, attract and retain customers, fight fraud, or meet regulatory compliances, Fiserv provides the expertise, tools, and guidance to help you solve problems and meet business demands.

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.
June 2, 2014

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