An optimization review can improve core utilization.
Core processors are often equipped with such a wide array of functionality and customization options that credit unions may not be using their systems to full effect. Most vendors offer some form of optimization service, meeting with client institutions’ employees to review how they use the system and to suggest underutilized features and new configurations to improve efficiency.
$390 million Sooper Credit Union, Arvada, Colorado, collaborated with its core provider, CUES Supplier member CUProdigy, Layton, Utah, on an operational review earlier this year—its first since converting to that system in 2015, say Sooper CU CEO and CUES member Dan Kester.
Over three days in January 2019, Sooper CU staff teams from operations, lending, accounting and finance met with CUProdigy representatives to talk through their questions and seek solutions. “We learned some things. They learned some things. It was a great way to … put faces to names and talk about how we’re using the system—to increase efficiency for both sides,” Kester notes. “It was well worth it.”
The operational review began with high-level strategy discussions with executive management and then proceeded with departmental meetings, says VP/IT Josh Henderson. A primary aim of those sessions was to pinpoint differences in “how you’re doing something with the system versus how system developers envisioned it would work” and to help “debunk ‘tribal knowledge’ on what the system could and couldn’t do.”
One example of an improvement that came out of the review was learning ways to streamline the loan application process by prefilling fields with data already available in the system. That change makes the process more efficient for staff and easier for members and decreases the potential for data entry errors, Henderson notes.
Vendors often charge for an optimization review, but it’s usually a very reasonable fee with a high return for credit unions that actually execute on the recommendations, says Brad Smith, managing director with CUES strategic partner Cornerstone Advisors, Scottsdale, Arizona.
“Some credit unions don’t use the reviews because they’re concerned that it’s nothing but a vendor sales opportunity. And some vendors do end up recommending a whole lot of new products and services—but oftentimes they provide good recommendations as well,” Smith says.
Credit unions can also hire consultants to provide an objective review of core system performance. Smith recommends an optimization study every three years to ensure that (1) the system has been updated regularly, (2) it is being used optimally to handle increased transaction volume, (3) integration with other systems is working well, (4) users have been trained on key features, and (5) previous recommendations to optimize functionality have been acted on.
These periodic reviews benefit core providers as well, notes Teri Van Frank, president/CEO of CUES Supplier member Share One, Memphis, Tennessee. “We learn how they are using the system, so we can come back and make any needed changes.”
Last year, Share One sent out a group of installation and account managers and the manager of education to visit more than 75% of its client credit unions to review their procedures and identify features they might not be using.
“We stood behind teller lines and watched how the tellers do things. From there we offered retraining—and better training,” she says. “And we’ve automated a lot of our systems, so for credit unions not using that functionality, we installed the automation for them. And we did a lot of the back-end work they had not been doing.”
Testing Strategic Alignment
An in-depth assessment of core performance every three years or so can help a credit union take stock of whether the system is helping the organization work toward its strategic objectives and accomplish its business plans, says Bret Weekes, CEO of CUProdigy.
Such reviews involve an assessment of what core features the credit union uses in its operations, whether it is using those features optimally, and what additional features and functions it could use to streamline operations and/or render greater value.
“The core system sits at the center of technology in credit union operations and is often the direct connection to members in different aspects of delivery, from mobile banking to auto-decisioning loans,” Weekes says. “Even if a third party is the face of a system, … the core drives the data back and forth to provide those services and the necessary integration.”
An operational review can provide a solid reality check on whether it’s time to make a change or to optimize current core capabilities. Matt Lefler, vice president at CUES Supplier member Enhanced Software Products, Spokane Valley, Washington, suggests this scenario: A credit union is cruising along, content with its current processes and systems. Then executives go to a conference and hear about colleagues doing something different. Suddenly, the executives feel that their credit union is behind the times. They may start searching for a new vendor when the odds are, had communication been better, they might have discovered that their current core provider could do the same things. In short, poor communication between a core provider and client credit union can create significant barriers to success.
There is no one-size-fits-all review that will work for all credit unions, Lefler says. “It comes down to each credit union’s strategic roadmap and what they want to accomplish with their core.”
If a credit union is looking to improve efficiency, for example, its first stop should be to talk with its core provider about how to accomplish that aim. The next system review should start with an executive-level discussion about this strategic goal, before customer service and development professionals from the core provider begin collecting feedback from and working alongside end users.
“Strategically, are we aligned with the credit union’s vision and mission?” Lefler asks. “Tactically, are we addressing the day-to-day issues that member service reps encounter regularly? And are we making the member experience outside the branch as seamless as possible?”cues icon
Karen Bankston is a long-time contributor to Credit Union Management and writes about membership growth, operations, technology and governance. She is the proprietor of Precision Prose, Eugene, Oregon.