POTTSTOWN, Penn. — Diamond Credit Union has more than tripled its assets over the last decade by continually adding new products and services to stay a step ahead of the local competition.
Ask President and CEO John M. Faust to cite the reason for that growth, and he points first to a change in its core system.
Over the last ten years the $361-million Diamond Credit Union has grown by almost $250 million in assets by adding new technology, such as courtesy pay 10 years ago, interest-only home equity loans 15 years ago, and risk-based lending over a decade ago. The CU's bill pay has 35% of its checking households using the service and it's the first in its region to deliver remote deposit capture, Faust said. Diamond CU is running on the UltraData Enterprise system.
"We wanted to align our company with a system that lets us conduct business the way we want to, instead of having to tailor our processes to the system," said Faust.
Faust said that years ago DCU decided that being an innovator was the best way to stand out in a marketplace in which "everyone is doing the same things. We needed business points of differentiation. We just get in the games a little earlier than others."
That strategy led to Diamond CU becoming the first in its markets to offer instant-issue debit cards. The same can be said for allowing DCU members to customize the look of their debit card, Faust shared. But Diamond never tries to be the very first in the country to offer a new product or service.
"When you are the very first, you have higher development costs and have some scrapes and bumps," Faust said. "We'd rather have those issues resolved by others. But shortly thereafter we come in quickly and position ourselves as leading edge in the eyes of our marketplace."
Faust said that without technological flexibility all of the changes made over the years would probably not have been affordable for Diamond. "I think it would have cost us hundreds of thousands of additional dollars if we would have to write code in-house and develop a lot of the services ourselves," said Faust, noting the core system has allowed it to easily bolt on third-party technology.
"In such a fast-paced environment, our systems must offer flexibility in order to ensure our credit unions remain competitive in their respective markets," said David McConney, EVP and general manager, credit union core systems group, Harland Financial Solutions, Pleasanton, Calif., noting it seeks to offer credit unions the ability to interface with virtually any application they choose. "We know we can't be all things to all clients and enabling them to leverage existing investments or additional applications ensures their competitive advantage."
Faust said that 20 years ago he never predicted the credit union would be able to offer instant debit cards or remote deposit, or even considered that those services would be possible. "But we did realize that this is a dynamic industry and that product development and software integration were going to play vital roles in our growth," he said.
The CEO pointed out there is another cost associated with core systems that don't easily allow the CU to innovate. "This expense may be the greatest—it's when your marketplace considers you irrelevant."
Best Practices CUJ 2009
CU: Diamond CU
Best Practice: New Product, Service Development
Vendor: UltraData
