The nation's leading data processing vendor to small credit unions built its 1,250-client following with a simple formula- keep it cheap and easy.
"One thing about FedComp is the cost," said Jeanne Walker, president at $19-million Southern FCU in Houston, Texas. "I don't know why small credit unions bother to look any further, because FedComp can't be beat."
FedComp hasn't been beat, at least not in the market for credit unions under $25 million in assets. According to Callahan and Associate's Technology Survey 2003, FedComp holds nearly 18% of the small CU market-three percentage points more than FISERV's combined family of DP vendors and 10 percentage points more than FedComp's stiffest competitor, Computer Consultants Corp., which was recently purchased by Aurum Technology.
Derrick Smith, FedComp's president of 11 eleven years, figures that FedComp's affordability is one factor keeping the competition at bay. "Other vendors say that we've spoiled the small credit union market."
When FedComp emerged from a solely DOS-based product environment and launched it sWindows-based TNG data processing system in 2001, credit unions paid about $9,000 for TNG, Smith said. Today, CUs pay about $5,000, and "micro" credit unions pay even less.
Southern FCU paid $6,500 three years ago for a five-user license of the TNG software and most options, including share draft and ATM transactions and direct deposit, Walker said.
Online Banking For $69
The 3,000-member CU adds FedComp's Internet Teller online banking system for another $69 per month, said Walker. About one-third of the credit union's membership uses Internet Teller, she said.
Internet Teller is full-feature, offering website set-up, bill pay and soon, online loan applications integrated to TNG, she said.
"FedComp is working diligently to stay abreast and maintain state-of-the-art technology," Walker said. "I can assure you that when the integrated lending program is available it will be much less expensive than other systems."
Although the DP vendor recently signed its 900th credit union onto TNG, about 350 credit unions still have active support contracts for DOS-based FedComp systems.
TNG's affordability is accompanied by impressive functionality, Walker continued. Driven by a Microsoft SQL database, TNG runs 3,000 real-time, general ledger transactions every month at Southern Federal Credit Union, offers Internet banking, electronic photo identification, debt collection and mortgages, and supports ATMs and shared branching.
"We're very much expanding our host-based services," Smith added. "Also, we're working hard on real-time interfaces," for shared branching and ATM communications, for example.
"TNG is a very complex system, and although our focus is on building the perfect system for credit unions $50 million and under, TNG is scaleable to 50,000 members and works great for larger credit unions," said Smith.
Fewer than 20 FedComp credit unions hold more than $20 million in assets, he said.
FedComp prides itself on usability, as well, according to Smith.
The firm relies on self-service installation with a line of installation wizards for many products.
"Today it's possible for a FedComp credit union to set up a website on its own in 15 minutes using an installation wizard," Smith explained. "Credit unions can even go from DOS to Windows with the wizard. The wizards really help keep costs down and add a tremendous level of productivity."
'Ten Minutes Of Time'
In the second half of April, for example, about 25 credit union websites, Internet Tellers and e-mail systems were launched, demanding a total of about 10 minutes of FedComp's support time, Smith said.
Walker emphasized the benefits of FedComp's online training resources. "Most systems do not offer this type of on-line training, which is a very efficient and economical way to train new employees or train current employees on new jobs."
In addition, FedComp's Custom Report Writer gives Southern FCU "the ability to write any report we can possibly want or need with a few keystrokes." Walker said.
Company's Unique Pedigree
FedComp was born at a small West Virginia credit union in 1982, Smith said. "A lot of vendors claim to have credit union-based systems, but FedComp does. FedComp began with a credit union manager dictating the user interface and functionality of the software. More than half of this company includes credit union members, board of directors, or former examiners."
CUJ Resources
For more info: * Fedcomp at www.fedcomp.com.
