Why Did This Alabama Credit Union Take Back Its Core?

Increased flexibility and leaner operations are just two reasons Birmingham’s Mutual Savings left its service bureau, but the move is not for everyone.

If a credit union wants to do things on its own time, it has to go its own way. Mutual Savings Credit Union ($178.8M, Birmingham, AL) did that by leaving the confines of its service bureau relationship with its core processor and taking the platform in-house.

That was in August 2013, five years after the Alabama credit union originally converted to the Symitar Episys platform as a data center user. That conversion involved severing a 25-year relationship with its Birmingham-based processor while Mutual Savings was in NCUA conservatorship, a process that also installed a new board and CEO.

We came out of conservatorship in 2010, says chief technology officer Mike Shaw. That engrained in us a strong ethic of being highly efficient, lean, and mean. But we wanted to make sure we could walk before we run.

Mike Shaw, CTO, Mutual Savings Credit Union

When the time was right, Mutual Savings migrated its core processing back in-house, bucking an industry trend and reducing its platform costs by 30% to 40%, Shaw says.

The pricing model depends on a lot of factors, he cautions. You can’t assume you’ll do the same.

Driving The Train

Controlling costs is important; so, too, is controlling the technology infrastructure as much as possible at Mutual Savings. Shaw says the ability to get things done quickly was a big factor in taking it back to the house.

People automatically assume you inherit all these efficiencies when you go to a service bureau, he says. That’s true, but you also inherit problems. We wanted to cut out the middleman where we could. Now when we need something done, it’s a lot easier to just walk down the hall.


Data as of 09.30.15

  • HQ: Birmingham, AL
  • ASSETS: $178.8M
  • MEMBERS: 46,181
  • 12-MO SHARE GROWTH: 35.45%
  • 12-MO LOAN GROWTH: 19.46%
  • ROA: 0.55%

Down the hall is where Shaw’s team of three technologists are located. And that team now includes a software engineer, who handles tasks such as automating nightly ACH batches and image downloads, just to name two.

We pay a little more for that position, but it’s worth it, Shaw says. You can cut costs but you don’t want to be penny-wise and pound-foolish. You have to invest in doing this right.

As a result of that investment, Mutual Savings had the agility to go live with a new mobile provider in a single afternoon.

We got the VPN set up, got the third party on the phone, and were ready to rock, Shaw says.

We wanted to cut out the middleman where we could. Now when we need something done, it’s a lot easier to just walk down the hall.

Picking And Choosing

The Mutual Savings CTO stresses that taking the core in-house is not a knock on the data centers operated by Symitar owner Jack Henry Associates. The sophistication and automation of today’s leading-edge cores also make it possible for even small shops like Shaw’s to do a lot more on their own.

Mutual Savings doesn’t do everything in-house. Jwaala and Access Softek provided hosted home and mobile banking solutions, respectively. CUNA Mutual provides the credit union with a hosted Loanliner mobile lending app and the credit union uses Verifin’s hosted anti-fraud and money laundering solution.

The credit union also outsources disaster recovery through the JHA centers.

Combine all that with the JHA service bureau-based home banking and mobile banking and a good recovery time at our hot site, and we have a pretty good DR and business continuity plan, Shaw says.

He also can plan system upgrades when it works for the credit union and not for the provider or the 100 or so other credit unions all on the system together.

Upgrades always seemed to happen at terrible times for us, Shaw says.

But there is one major downside to all this flexibility and financial benefit.

It’s not for everybody, Shaw says of going it alone. You’re gaining a lot of freedom, but you’re also taking on a lot of responsibility.

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December 7, 2015

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