Some core providers work solely with credit unions. Others cast a wider net, serving banks and credit unions alike. Given the rapid shifting of technology and consumer behaviors, some credit unions are turning to larger providers to ensure they meet modern members’ needs.
A little more than a year ago, Signal Financial Federal Credit Union ($408.0M, Kensington, MD) Prospera Credit Union ($363.7MM, Appleton, WI) both made the switch to some of the nation’s largest core providers. Signal Financial converted from Jack Henry’s Symitar to Fiserv, moving from one large provider to another. Prospera, meanwhile, moved from CU*Answers — a credit union-only provider — to Jack Henry.
Leaders at both credit unions say the decision helped their institutions better adapt to the times.
“We knew we wanted to get to a place where we had the flexibility to grow in the way we wanted to grow,” explains Shonna Prickette, vice president of digital services at Prospera. “I think we felt a bit stifled on our old provider.”
Both credit unions had also been with their previous provider for decades.
“We didn’t feel we were differentiating ourselves from a core knowledge perspective,” says Alec Patrick, chief operating officer at Signal Financial. “We have a large commercial banking portfolio, so we needed a core that was going to be able to support that. For Symitar, they weren’t built around that. You could kind of build it on the side or sort of make it work, but it wasn’t built to handle that originally.”
Instead of leaving the decision to IT, which had led the charge with Signal Financial’s previous conversion, Patrick says it was important everyone have a voice, with the goal of each department ultimately owning its part of the core.
“We tried to focus on was making sure that all departments were part of the negotiation,” he says. “Our goal is to have experts across the whole organization as opposed to having one or two.”
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Improved Integration and Automation
Larger core providers are often attractive to credit unions because of the broad array of technologies and flexibility they enable. For both Prospera and Signal Financial, the decision to switch came largely from a need for improved integration.
“We had a bunch of different solutions that didn’t talk well together,” explains Patrick. “We had a lot of manual processes, and our goal was to improve some of those internal operations and make that better and smoother.”
Both credit unions also switched their online banking vendors at the same time, so it was important to not be limited when it came to selecting other partners.
“The core that we were on offered some integration options but was a little bit more directed toward just one vendor,” Prickette says. “We wanted to have the flexibility of choosing our own integration partners.”
The new core has enabled easier interfaces with Lumin Digital for online banking and Velera for debit cards, as well as others.
“The switch not only allowed us to choose vendor partners that best suited our needs but also helped us to look at different automation platforms,” she adds. “That just helps to bring efficiency to our internal staff experience and accessibility to our member experience as well.”
Signal Financial and Prospera also both switched from an in-house solution — with the core being maintained at the credit unions’ data centers — to a cloud-based one. Those moves come at a cost but will reduce reliance on internal data centers and reduce maintenance and security burdens for internal IT departments. All that helps both credit unions operate more efficiently.
“File transfers and running reports and things that we were doing manually in house are now fully automated, provided they run on the prescribed schedule that we’ve outlined,” Prickette says.
What To Expect With Training And Service
A common concern with larger core providers that work with non-credit union clients is the possibility of service gaps. Because these companies cater to such a large client base, some feel customer support can be less personalized, with longer wait times or less direct support.
“We did experience a few internal hiccups that were really out of our control, such as situations where we had assigned the responsibility of some task to a third party or an element that wasn’t within our control that was missed or miscommunicated,” Prickette says. “That led to obstacles we had to work through post-going live.”
Providers can alleviate some of these challenges by investing more time into understanding a credit union’s business model and success metrics, Prickette says. She adds that checking back post-implementation makes a huge difference.
Similarly, Patrick emphasizes the need for better training — not just for his staff but those on the vendor side as well.
“I felt like they had people training us who were brand new,” he says. “They have the training manual in front of them and they could follow that, but they couldn’t answer questions beyond what the book said. I feel like they should be going out of their way to train us because then we don’t bother them as much if we know more about the system with tickets and cases opened.”
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Lessons Learned
Although both credit unions have achieved positive outcomes following their core conversions, they’ve learned plenty of lessons along the way. For starters, Patrick says, expect a learning curve.
“With an older core, you may have customized a lot of things to fit around your processes,” he says. “When you shift, you lose some of that knowledge that you had, you lose some of that expertise, but you’re gaining expertise across the whole organization.”
Prospera’s Prickette adds that the process doesn’t end once the switch is flipped and things go live on the new system.
“Other financial institutions should kind of temper their expectations about the marathon that is a project like this,” she says.