12 minutes
Four user case studies
Month by month, often without fanfare, credit union core system providers have implemented upgrades that collectively have transformed their products. To shed light on those changes, CU Management talked to four CUs that range in size from $41 million to $4 billion and use four different cores. We also talked to a consultant experienced in core selections and conversions.
According to Sabeh Samaha, founder/CEO of Samaha & Associates, a Miami-based consulting firm that specializes in core systems, the three top-tier credit union core systems providers are DNA from Fiserv, a CUES Supplier member based in Brookfield, Wisconsin; Symitar from Jack Henry, a CUES Supplier member based in Monett, Missouri; and KeyStone from Corelation.
Each of these three core systems has raised its game in recent times, Samaha says. Specifically, they process data faster; require fewer keystrokes per function; get members and staff to their destinations faster; access more data, both locally and remotely; make it quicker and easier for members to get what they want; support omnichannel processing; deliver uniform and consistent results; enable more member relationship management and cross-selling; provide data warehouses and data mining; integrate more fintech solutions and other third-party niche systems; and support early versions of artificial intelligence.
There are also good second-tier systems that can be a right choice for many CUs, he adds. Learn about three of those systems below.
Comparing Three Top Cores
Bob Bender, chief technology officer of Founders Federal Credit Union, Lancaster, South Carolina, says the $4 billion CU converted to Corelation’s KeyStone in July 2020. However, to make sure the credit union made the right choice and executed the right conversion, the project began in 2013.
Founders FCU had been using its previous core for more than 31 years when Bender and his team concluded that “it would not keep pace with our need. ... We needed a core that would allow us to bring innovation to members.”
That set off an investigation. For Bender, who previously worked for Fiserv and knew the market well, there were only three possible candidates: DNA, Symitar and KeyStone.
Founders FCU’s previous core did provide a simplicity and focus that Bender liked. It was a “one-box” solution. Corelation, he says, has a similar “common-sense design.”
The choice boiled down to whether Founders FCU wanted an expansive core that had brought together a lot of functionality by building or acquiring applications or one that was simply a core but was easy to manage and played well with the CU’s other systems. Founders FCU, he says, wanted a core it could drive itself, not to be a passenger on a vendor-driven core.
“We visited CUs that had successful implementations with all three systems,” Bender recounts. “Symitar and DNA were working, but they both required considerable augmentation with third-party resources. We wanted something we could operate on our own, and we thought we could do that with KeyStone. It wasn’t the cheapest or the most expensive, but it was the one that felt like the best fit.”
Staff members were a factor in the decision as well. He explains: “FFCU has a talented, creative, long-term employee base that works together effectively to provide solutions by using a core as it was designed, with flexibility for customization of specific workflows and processes that serve members. Corelation delivered.”
Changing cores meant moving from an account-centric system to a complex, person-centric KeyStone system, which can present multiple accounts of the same person to provide a wider view. In addition, Bender says, the CU had more than 120 vendors to “review and determine how they would be optimized with the new core solution on live day.”
It worked. Founders FCU’s core system requires connections to up to 15 additional critical services, and they all came up immediately when IT flipped the switch. “We only had to do some integration work with our cybersecurity and data resilience programs and our scheduler,” Bender says.
The system continues to work well more than two years later.
“We recently did a critical conversion to Mastercard. It was a major lift, but we did this with PSCU (St. Petersburg, Florida, a CUESolutions provider) and Corelation quickly and successfully. With another core, we’d have had to bring in third parties to augment IT staff.”
Other cores rely on add-ons or fintechs to add value to their sales, Bender says. “Corelation stays true to its original game plan and focuses on providing the best core possible. Third parties work hard to win their business as add-ons.”
Samaha notes that the all-in-one core movement may have peaked. Core systems once aggressively bought up niche players with winning apps and integrated them into the cores’ product offerings, he reports. That’s not happening so much anymore. “There are so many niche applications that the cores are now inclined to work with them … instead of buying them.”
How Many Integrations?
$550 million Call Federal Credit Union, Richmond, Virginia, chose to stick with Fiserv but not, at its size, with Fiserv’s flagship DNA product. Call FCU has been a Fiserv shop for many years, using that vendor’s Portico as its core system and Corillian for online and mobile banking, reports Andrew Burnett, VP/COO. Call FCU last did a core request for proposal in 2017, he reports.
What does Call FCU lose by using the smaller Portico core system instead of the more powerful DNA? “It’s all a matter of integration with other systems and apps,” Burnett explains. “DNA’s claim to fame is the large number of such integrations it supports. Portico supports fewer, but it supports a lot of third-party systems and apps that we use.”
Call FCU uses other tech solutions—Prism for analytics, MeridianLink for account opening and loan applications, and MoneyPass for payments—that are not Fiserv products but for which Fiserv has prebuilt interfaces. Call FCU uses Fiserv’s reporting analytics, he adds, without a separate integration.
Portico is hosted, meaning that Fiserv manages the physical infrastructure to support it and pushes out the functionality in the form of software updates to its clients about every six weeks. At Call FCU, updates are applied automatically. But the CU gets advance notice. “We preview it and test it for issues before it’s introduced,” Burnett explains.
That process, he notes, “has gotten a lot better in the past couple of years. The updates are more frequent, and we have fewer issues. We just did a big migration to get more back-end functionality, and it was a lot smoother than it used to be.”
Peer contact is also a factor. There is an organized user group for both Portico and Corillian, Burnett says. They meet regularly, sometimes in person and sometimes through Zoom, to discuss issues and share ideas. Historically, Fiserv wasn’t active in such groups but now might occasionally fly someone in to explain new products or features, he says, “and they’ve become more responsive to the concerns users raise.”
A good core system relationship is based on a good contract, Burnett notes, and here he recommends bringing in a professional. “It’s very helpful to have a third-party specialist review your contracts,” he points out. “There are specialists who can make a huge difference in the pricing you get by telling you what to ask for.”
CU managers can find such people at trade shows or learn about them from peers, he explains. Many of them formerly worked for core providers. The specialist Call FCU used had worked previously for Fiserv. The CU has extended its Fiserv contracts several times to “realize significant savings and discounts for additional products.
“Know your contract dates and the times for negotiating,” he advises. And start the process well in advance of contract termination dates. A good conversion will take as long as two years, he notes—a year to do the RFP and negotiating and another year for the implementation.
Durable relationships matter, and they start with good contracts, Samaha agrees. “You have to try to anticipate, knowing the technology will evolve,” he explains. Most contracts are for five or seven years, but some CUs sign up for 10. “That can be smart but also risky. The 10-year ‘savings’ don’t always materialize.”
Mergers clearly create stress for core systems. Call FCU absorbed a smaller CU in 2020, and doing so took a lot of work, Burnett reports.
“We had different cores,” he says. “We had weekly meetings to examine the data, validate files on both sides and spot other issues. Fiserv provided a project team that worked remotely. It was an extra project we paid for. It was a long process but well managed.”
Focused on Core
$41 million Connection Credit Union, Silverdale, Washington, told us its story about using a Tier 2 core system. The CU was using Harland UltraData for its core when Scott Prior came aboard as CEO in 2010. He knew he wanted something better. The back-end accounting on the core system, for example, was still DOS-based. And getting a single sign-in to online banking from the webpage turned out to be expensive.
“The core was holding us back from what we needed to do,” he says. “We needed newer, more integrated technology.”
Prior brought experience from working at three other CUs and a community bank. He knew what to do. By the time the UltraData contract expired in 2013, he was ready to move to ESP’s FORZA³.
He liked ESP partly because it focused on being a core.
“They decided that all the services springing up around mobile banking were outside their core mission,” he explains. “They would provide the open architecture and let their CU clients pick their own complementary products. Each was free to find the solution that made the most sense for them.”
But ESP also would suggest tech partners, one of which was Tyfone for digital banking. Prior liked Tyfone a lot. “They had a top-notch solution,” he reports. “Some big, progressive CUs were using them.”
But Tyfone was expensive. So Prior found five other CUs on the ESP core, and they went to Tyfone as a group to negotiate prices they could afford. “Tyfone had to do six integrations,” he notes, “but they were 90% the same. We were able to do something similar with MeridianLink. There are economies in working as a group.”
In its vendor search, Connection CU found that some core vendors “would not talk to us due to our size,” Prior recalls, but his team did look at 10 in the first round. “Most of them were herding cats, pursuing all things digital and mobile in all directions,” he says. ESP was different, focused.
Since signing with ESP, Connection CU has found six more users that want to deal with Tyfone collectively. “A couple are large CUs that think small,” he observes. “They are willing to share and cooperate. We need more of that.”
ESP has a CEO-level user group for about 50 clients and an annual conference, Prior reports. Seven users are in Washington, where Connection CU is based. “We talk about what we need.” There’s also training for the hands-on users, he adds.
Hosted Delivery
$670 million First Heritage Federal Credit Union, Corning, New York, has been using the Symitar Episys since 1996. The system was located on its own servers until 2020 when it moved to hosted delivery, reports Christine Francis, SVP/IT and marketing.
A big advantage is that upgrades now happen automatically, implemented by the Symitar team. “Our in-house support team is notified of each upgrade release but doesn’t normally have to do anything,” she says, “Not having to be there in the middle of the night to apply upgrades is one of the many benefits of moving to the hosted environment.”
Disaster recovery and business continuity are also good reasons to use a hosted core, Francis adds. EASE (Symitar’s hosted service) fully replicates core operations in two data centers in different states, she explains, and EASE does a fail-over drill every six months to confirm that both are fully functional.
“A credit union our size,” she observes, “could never accomplish such redundancy on our own.”
Episys is the system of record for member shares and loans except first mortgages, Francis explains. Those are serviced in-house by a server running FICS. Episys and FICS are fully integrated, so the retail team can apply payments right in Episys.
Changing to a hosted environment had no impact on member experience or staff activity except for IT, she reports. IT now has more time to focus on “projects that enhance daily operations and members’ financial well-being instead of performing daily, nightly, monthly, quarterly and yearly processing.
“EASE does an excellent job of performing the processing,” she testifies, “and reaches out to our team if there are issues. Our information security officer was included in the migration project to make sure that all security concerns were addressed.”
Core system user groups are available, such as the Symitar Midwest Users Group in which First Heritage FCU participates. Through SMUG, Symitar users help each other with ideas, answers to questions and troubleshooting.
First Heritage FCU has absorbed several small CUs over the years, doing the core system mergers in-house without involving Symitar. “They were fairly easy,” she explains, “building the account, share and loan records from reports generated by the smaller credit unions.”
A big merger is another story. “We did one larger merger where we brought 20,000 members into our credit union,” she reports. “We used Symitar’s merger consulting division to help merge the data. I would use them again for larger mergers.”
Choosing a System
Choosing and using a core system is a big deal for credit unions. A lot of them fail to get full value from their system, Samaha points out, because they never exploit useful features it may contain.
“There’s an incentive for the CU to just get it done,” he observes. “The vendor is often busy with multiple installations.”
The assumption that less critical features will be turned on later never happens, he reports. Then decline sets in—the status quo settles, subject matter experts leave the CU, and handoffs are porous. The start-small-and-then-catch-up strategy often misfires.
“Do it once; do it right,” Bender says. cues icon
Richard H. Gamble writes from Grand Junction, Colorado.
