Technology

Core Processors Survey Mobile Landscape

New, vendor-agnostic standards should greatly improve product integration.

January 13, 2014
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Tom Berdan sees credit unions’ relationships with their core processing providers taking on increased importance as the burdens on credit unions turn from a steady rain into a downpour.

“They’re facing pressures on many fronts—margins, personnel expenses, competitors, compliance, and consumer expectations,” says Berdan, vice president of product management for Harland Financial Solutions. “Consumers now wield great power thanks to the explosion in the use of mobile devices.

“The move to tablets and smartphones is a seismic change,” he continues. “Last year, smartphone unit sales eclipsed feature phone sales.”

Teri Van Frank, president/CEO of Share One, says the slowly recovering economy makes it harder for credit unions to fulfill traditional tasks.

“They’re not hiring marketing or collections people at the same rate as before, so our purpose is to help their employees who wear several hats be more effective,” she says. “Our core processing system is designed to make things easier and more efficient.”

And as older members become net savers rather than net borrowers, Van Frank notes, credit unions need to recruit younger members—as well as consumers with less-than-perfect credit histories.

“Most credit unions have not been aggressive at recruiting these consumers,” she says. “Part of appealing to younger members is keeping in mind they want instant gratification. If they apply for a loan, they don’t want to have to go to a brick-and-mortar branch to start or complete the process, and they don’t want to have to wait a long time for a decision.

“The faster you can make the process for them, the more likely they are to come back to you for other loans, checking and savings accounts, and other services,” Van Frank continues.

CUFX standards improve Integration

Symitar President Ted Bilke says other external factors are changing the face of core processing and the demands placed on it, including the increased volume of core conversions and consolidation among core processing providers.

One significant development is the adoption of new integration standards driven by the CUNA Technology Council through the Credit Union Financial Exchange (CUFX). This is a standards initiative designed to:

* Simplify integration and reduce initial and ongoing costs of independent vendor-provided and credit union-created offerings;

* Increase speed of delivery of new business functions across the credit union industry;

* Improve the member experience and employee efficiency; and

* Free vendors from repetitive, time-consuming, low-impact customization so they can focus their efforts on application innovation.

Credit unions must continually improve their technical infrastructures to best serve members and remain competitive. Integration standards such as CUFX promise to reduce inefficiency in connecting applications.

SIDEBAR:

Experts from both credit unions and vendors are collaborating on CUFX to develop vendor-agnostic standards that make product and service integration across the credit union industry faster, easier, and less expensive.

Bilke says the credit union movement needs these standards to reduce the costs and complications involved with integrating with third-party providers. This will help credit unions provide offerings such as mobile financial services.

“Mobile apps are the hottest thing now,” he says. “Credit unions did an extensive early adoption of first-round apps. Now they want to differentiate themselves by segmenting the market according to device and experience—from simple and straightforward to elaborate financial management capabilities.

“But it’s sometimes frustrating for them to find the right solution,” Bilke continues. “There’s an element of doubt. Integrity and standardized interfaces are important.”

NEXT: Single suite or best of breed?

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