MADISON, Wis. — When a credit union's core contract is nearing renewal, the executive responsible for making this all-important decision is faced with one nagging question: Do we have the best solution on the market?
"We are in a seven-year contract with our core provider, Fiserv, and we are in year five so it's a great time to renegotiate," said Shay Santos, CFO of Dane County CU here. "I thought it would nice to get information on other core processors to see how other credit unions perceive the type of service and support they are receiving."
Usually the place to acquire relatable information is through listservs, network meetings, conventions and conferences. But when a credit union is spending upwards of $50,000 per month on its core processor, like the $140 million Dane County CU is, attaining actionable, reliable information is difficult.
"Unless you hire a consultant and they have experience with different vendors through the credit unions that they serve, it's hard to find unvarnished, base comments on core processers," he said.
Santos explained that he receives upwards of 30 emails a day from various vendors and third parties pitching different services. It wasn't until the he saw a second email from Samuel Brownell, founder of CUCollaborate that he decided to investigate.
Brownell wasn't selling anything; rather he wanted Santos to participate in the inaugural 2014 Core Data Processing Satisfaction Survey. "We had had 298 credit unions participate in the guide that was published in July," said Brownell. "However, our surveys remain open year round and we have already had an additional 15 credit unions take the survey since we published the guide."
Brownell explained that the questions are geared toward rating various aspects of a core platform's functionality and the provider's service on a six-point scale from "very poor& mdash; 1" to "great — 6." The focus: general functionality, user interface, advanced features, support and network openness.
"We also included open-ended questions asking credit unions to evaluate their core's strengths, weaknesses, and, in the 2015 Core Data Processing Satisfaction Survey, areas where the credit unions would like to see developments made," said Brownell.
Each participating credit union's identify is anonymous, but the information and data contained in the approximate 130 survey report is available to all. "For me, it confirmed we are not on the system that everyone just loves, but we are on the high side of the good average of people who are satisfied with the same core processor," said Santos adding that it took roughly one hour to complete the survey.
One of Santos' takeaways was how the participating vendors approach answering survey questions. "Some totally cooperated and they answered all the questions and were forthcoming, but some others weren't as forthcoming," he said.
Working with core providers on the survey was tricky. "Unfortunately, with any sort of satisfaction survey that produces perceived winners and losers you are going to get some people who discount your work," Brownell noted. "However, we don't claim that our guide should be considered a definitive guide to selecting a new core platform. Instead, we see it as a necessary component in a comprehensive evaluation process."
He added that it's not easy to simply list the "winning" core providers as there are numerous categories on which they were judged. To review survey findings, he encouraged executives to visit:
In an effort to ensure the best contract terms are reached, Santos said Dane County CU has hired a third-party consultant, the Centreville, Va.-based ICI Consulting. "Too often, credit unions wait too long to consider or start negotiating on an existing contract," said ICI EVP Doug Fenix.
Credits union should begin the negotiation process 18 to 24 months before it is set to expire, he explained. "If they start short of 12 months, their existing vendor will not take them seriously because most conversions will take six to 12 months depending on the size of the credit union."
As Santos and his team work with ICI on core contract wants, needs and negotiations, they share a collective goal. "We want to make sure our members have a stable environment such as home banking and mobile deposits," said Santos who has been party to two core conversions. during his career.
Brownell explained that his firm aims to continue to provide unique data to CUs and encourages more credit unions to participate in the process. He has in place a syndicated research group that collectively votes on what topics of research they would like the firm to cover. "We are currently wrapping up our Mobile Banking Satisfaction Survey and plan on launching similar surveys and guides for internet home banking, lending technology, card payments and auditors," he said.
