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The credit union movement is built on a foundation of collaboration that dates back more than 100 years. And that cooperative spirit is more important today than ever.
Why? One of the industry’s biggest challenges is keeping abreast of the race for new technology, where advances in the financial services marketplace seem to take place daily. Fueled by the innovation of fintech firms and coupled with the need to satisfy the demands of the modern consumer, technology is becoming all important to member service. Credit unions must keep up.
In 2012, the Credit Union National Association, Madison, Wis., established the Credit Union Financial Exchange to create a cooperative structure through which credit unions, credit union service organizations and credit union vendors could share existing and new technologies via an open architecture integration standard that would be available to the industry without cost.
According to the CUFX website, the group leverages credit union, core and vendor collaboration to develop and maintain an integration standard that—as it is adopted by more and more credit unions and vendors—will increasingly simplify the process of connecting various best-of-breed solutions with whatever core transaction system a particular credit union may be running.
The projected positive outcomes of widespread use of such a standard include a reduction of costs and time spent on systems integration; improvements in the member experience; a reduction of redundancy across all credit unions in systems implementation and integration efforts; and a better competitive niche for credit unions in the financial services marketplace, because they can more effectively innovate and more rapidly adopt technology.
Under the leadership of the CUNA Technology Council, 75 credit unions and vendors participated in the creation CUFX. Like many innovations, this effort grew out of necessity. The group now has a governing board, a steering committee, and a vendor advisory board, to which four new members were added in December. Version 3 of the online banking, mobile, and IVR specification was released for comment in July 2015.
“For credit unions to grow, remain competitive and provide the best member experiences across all channels, they must continually improve their technical infrastructure,” wrote CUES member Heather Moshier, EVP/information technology for $7 billion San Diego County Credit Union, San Diego, and a member of the CUNA Technology Council Governing Board, in this CUNA News Now article at the time of CUFX’s formation.
The core objective of CUFX, underscored a May 2015 Credit Union Times article, is to improve the member experience. According to the article, “achieving this requires the removal of technology barriers, a reduction in integration complexities and operating expenses, and providing the CUFX standard and support with no direct cost or fees.”
CUFX could be a solution to one of the biggest issues facing credit unions in the technology age, wrote John O’Shaughnessy, senior partner at Mobile Strategy Partners, Atlanta, on the CUNA Technology Council blog in October. “With modest budgets, credit unions are consistently challenged to provide competitive online and mobile solutions to keep existing members and recruit new ones – especially mobile-centric millennials.”
CUFX, O’Shaughnessy wrote, brings an open architecture platform that promotes real-time collaboration and could hasten the adoption of new technology and reduce costs and time spent in doing so. He describes the platform as providing “the latest industry recommendations for secure online and mobile communications” and as being “designed to allow software developers to focus on delivering user-facing functionality rather than complex back-end integration.”
One of the champions and beta testers of the standard is $2 billion Baxter Credit Union, based in Vernon Hills, Ill.
“We had an incredible number of vendors we had to integrate; we wanted to support this initiative to lower our overall costs,” Tim Tibbals, AVP/enterprise architecture for the CU and a member of the CUFX architecture committee, told Credit Union Times in the May 2015 article.
With the CUFX open architecture approach, participating credit unions and vendors clearly see the value of creating a pathway by which credit unions can quickly and economically adopt advanced, services-oriented technology as it comes to market – not months later.
Terrence Griffin is chief information officer of CUES Supplier member CO-OP Financial Services, a financial technology provider to credit unions based in Rancho Cucamonga, Calif. Reach him at 866.812.2872. Griffin is a member of the CUFX Vendor Advisory Board.
