Why Your Choice of Core Processor is Important to Your Members
Your credit union's core banking provider is the backbone of your operations. They manage your member accounts, process transactions, and provide the essential data and services that keep your credit union running smoothly. Most members will never interact with your core directly; still, fewer will know your core's name. Partnering with the best core processing platform for your credit union is imperative to running a thriving institution.
Why Your Core Matters
Your core system must be stable, efficient, and always available. It needs to be able to handle high transaction volumes, day in and day out. Your members expect their transactions to be processed quickly and accurately, without fail.
What happens when a credit union and core banking partnership don’t compliment each other, or maybe each has not paid the proper attention to that partnership? The point is that your members have a myriad of outlets now to ensure you and everyone else hear about it. Make sure the partnership is such that there is an understanding of urgency, frank and honest conversations can happen, and are expected. You answer to your members, and the core answers to you.
Picking a Winner
There are many factors to consider when choosing the right core provider for your credit union. You need to partner with a company that will be there for you - not just during the implementation phase but also long after go-live. They should have a proven track record in the credit union industry and be able to provide references upon request. Here are some key considerations:
- Size and complexity. Do you have a large, complex organization with multiple branches? If so, you'll need a core that can handle high transaction volumes and support a large number of users. (database structure is key)
- Growth plans. How fast is your credit union growing? You'll need a system that can scale to support future growth. (database structure and scalability)
- Budget. Obviously, you'll need to stay within your budget when selecting a core provider. But beware of low-cost providers that may not have the features and functionality you need to run your credit union effectively. (integrations are key here, what are the integration fees? You will integrate, that is for sure)
- Service and support. What kind of services and support does the vendor offer? (24/7/365, under one roof, etc. what is important to you)
Perform Your Due Diligence
Make sure you do your homework before selecting a core processor. Create a team from within your staff that can effectively evaluate all potential vendors. A team with an experienced teller, loan officer, an IT professional, or technology expert is a great place to start.
Next, utilize your credit union contacts and ascertain which core they are using and if they think it will be a good fit for your credit union. Also, be sure to read as many online reviews as you can find. Word-of-mouth is often the best tool to evaluate how your potential vendor will serve your account after the sale.
Once you've narrowed down your choices, invite each vendor in for an on-site demo. If a sales rep is willing to travel to your branch, it is a good indicator that they will go the extra mile after the sale. This is the time to grill them on their product offerings, services, and pricing.
You need to ensure the vendor is financially stable and has the technology and features you need to support your credit union's growth. But perhaps most importantly, you need to ensure they share your commitment to providing outstanding service to your members.
Finally, don't forget to ask about their development roadmap. What new features and functionality will they be rolling out in the near future? How will these enhancements benefit your credit union and its members?
Setting the Terms
After selecting your vendor, it's time to negotiate the contract. This is where an experienced credit union attorney can be extremely helpful. They will know exactly what to look for in the contract and help you avoid potential pitfalls.
For example, make sure the contract contains a detailed description of all services to be provided, along with associated pricing. The price should be all-inclusive, with no hidden costs or fees. In addition, the contract should spell out the terms of the agreement, including the length of the contract, payment schedule, and termination provisions. The contract should also specify the vendor's responsibility for data conversion, system training, and ongoing support. Be sure to get all of this in writing before you sign on the dotted line.
In Conclusion
Picking the right core processor is one of the most important decisions you'll make as a credit union leader. Be sure to do your due diligence to ensure you select a partner that will help you serve your members effectively for many years to come.