SAN DIEGO -
–Raj Shivdasani
The fifth generation of technology is now upon credit unions and their competitors, the key piece of which is web-based services, according to one person.
The trend is apparent in the number of credit unions and other financial services providers moving to outsource more of their technology solutions–even though credit unions have been lagging the trend a bit. During Harland Financial Solutions’ Connections Conference here, for instance, a show of hands at one session found that most of the institutions running in-house solutions were credit unions.
In a separate interview with the Credit Union Journal, Raj Shivdasani, president of Harland’s Enterprise Solutions Group, acknowledged the company is not just aware of the trend, it is seeking to remain ahead of it, including rolling out its Phoenix EFE (extended financial enterprise) solution from a bank client base to credit unions over the next two years (see related item).
To that end, Harland is building its platform upon the Microsoft .net framework, which he said allows for a single sign-on and for workflow within the confines of the core system. “This allows executives to have a single view, and delivers a highly integrated system where front-end channels are all real time and are connected to the back end,” Shivdasani said.
Phoenix EFE is all written in XML that includes adapters that will permit a credit union to connect with any core system silo, even if Harland is not the provider. That means a financial institution can get a view across its database, including trust services, insurance, cards and more, information that typically is not integrated. “This even allows the non-Harland channels to talk to a non-Harland core,” Shivdasani explained. “They can use Phoenix EFE to tie it all together and get one view of the total relationship.”
Shivdasani said the company is 50% of the way toward achieving that goal and has set a Summer of 2009 delivery date. It currently has four pilots up and running at institutions ranging from $200 million to $1 billion in assets.
“We recognize that the world does not need a core for banks, a core for thrifts and a core for credit unions,” explained Shivdasani of the move to Phoenix EFE. “Credit unions are more risk-adverse than other providers, but we do have credit unions already signed on.”
The most important channel for Harland, said Shivdasani, is the Internet. To that end it has made significant investments in its Cavion Plus subsidiary.
What all of that will mean to the marketplace, according to Shivdasani, is a solution that is sufficiently robust to handle the increasing expansion into business services. For Harland in particular, he added, it means a product competitive with the solutions provided by Open Solutions Inc., Glastonbury, Conn., which offers one of the leading platforms for serving commercial accounts.
“Our UltraData solution will continue to appeal to the fundamental retail-oriented credit union,” Shivdasani said. “But UltraData credit unions have said to us it’s good to know we do have an option, even though we’re not looking to go through a conversion. We are adding functionality to the UltraData solution.”
What Phoenix EFE offers Harland, added Shivdasani, is the ability to continue to offer appeal to those credit unions that are early-adopters. “For credit unions this is going to be a big bang,” he said. Harland expects most of the interest in the new platform to come from institutions of $2 billion and less in assets.
“Credit unions have really moved to something of a hybrid model,” Shivdasani said. “They are outsourcing some pieces and keeping others inside. We’ve even had some hardcore in-house clients amenable to outsourcing some pieces. When banks outsource or stay in-house, it’s all one way or the other.”
The Microsoft .net solution is where everyone in the market is headed, according to Shivdasani. “It’s just a matter of time in the U.S. before everyone begins to believe in the .net platform,” he said. “It offers great benefits. But we have to convert what that means back to the bank or credit union. A lot in the Microsoft world comes free. A lot in the IBM world you have to pay for.”
