CU*Answers, RDI To Bring E-doc Power
Essentially, what CU*Answers owner-clients want, they get, and what they wanted was a method to deal with electronic documents and archiving. What they got was a majority interest in Reed Data Inc. (RDI), of Midway, Utah, said Randy Karnes, CEO of the CU-owned data processing and networking CUSO here.
Through their ownership in CU*Answers, 72 credit unions are now allied with a company that supplies optical archiving and e-document delivery systems. During the CUSO's leadership conference, he told the 200-plus audience that the evolution of the "paperless office" would make the leap to electronic record retrieval and digital signatures in their credit unions starting in January 2007.
The collaboration of CU*Answers and Reed Data will place digital signature pads at the teller line and make member information readily available through a planned Teller Receipt Database, including loan documents, receipts, drivers license and other ID information. This alliance is different from other technology-related investments, said Karnes, because it is about something bigger than just a product offering. It's about credit unions creating their own destiny. "This is about history," he said. "CU*Answers and Reed clients need to be more than just e-doc savvy; they need to be known as e-doc innovators."
Asked why he chose CU*Answers, Bret Weekes, CEO of RDI said, "I wanted to be a part of the credit union movement, not part of a big data processor. The CU industry is approximately 9,000 credit unions with millions of members, with a need for millions of transactions. Our goal is to help credit unions fulfill those needs. We're building a collaborative network for distributed business processing. CU*Answers already has the ability and willingness to develop technology for the future, and that's what we are going to do. I don't think you can get a better foundation to establish a successful partnership."
CU*Answers provides data processing and technical services to approximately 200 credit unions. It's flagship software, CU*Base, is used by 107 CUs in 13 states that have a combined membership of nearly one million. RDI, a recognized industry leader in electronic document and image capture, management and archiving already has some 400 CU-clients.
Looking To The Future
At its shareholder meeting, Karnes mused that he's often asked what he sees in the future for CUs, and he's never shied away from answering. It always involved ownership, or "vesting" in the business delivery side of member service, he said, noting that if CUs have to depend on bank networks and outside vendors, they will remain at their mercy. But if credit unions dream big; if they envision their own participation as an important part of the process-far more important than just buying a service from a vendor-Karnes said they will see what he already sees: the network that lies beyond. The Peer-to-Peer Network that CU*Answers' 72 credit union owners have bought into is already developing, and with their continued (and growing) support, Karnes' team is determined to build it.
Karnes also announced the formation of a CUSO with Corporate One FCU of Columbus Ohio that will provide its turnkey Check 21 solution for credit unions. "A Check 21 CUSO puts all credit unions in the Check 21 business," said Karnes, complimenting Leo Buttke, Corporate One's CEO for making it an easy decision. "Our mutual vision to vest credit unions in the Check 21 business instead of just watching them become clients of a bank-dominated vendor process excites everyone here. Our two firms will create a great foundation for the future." They will initially be sole principals, but are open to new partner/investors. The partnership made "perfect sense" to Buttke as well. "We have a history of developing innovative solutions for credit unions, as does CU*Answers. I'm very excited about working with this visionary team to collaborate on even more ways to help members succeed," Buttke said.
CU*Answers owner-credit unions and users will have access to Corporate One's Check 21 program and its benefits, including reduced courier fees, online searchable image archive and faster clearing and return times for deposited items. Corporate One will gain increased volume of deposited items and share drafts from the CU*Answers alliance, allowing for greater negotiating power with image clearinghouses and making for reduced costs, they said
Corporate One, with $4.1 billion in assets under management, provides financial services to more than 800 credit unions. They provide correspondent services including ATM/debit cards, share draft imaging and depository and electronic payment services to CUs in Ohio, Kentucky and West Virginia, and investments services nationwide.
Karnes related the growth of CU*Answers, giving credit for it to the loyalty of its investors, who trust in the vision he presents for obtaining the wants and needs they ask for, and for a team that delivers. Like Karnes himself, they believe that credit unions are an essential part of the nation's financial services arena and need to grow their share of the marketplace, so they cheered both announcements heartily, he said.
"We believe our success is realized through the success of our credit union partners," Karnes stressed. "We readily assume their goals and hope this focus means everyone wins," he said. CU*Answers credit unions set a goal last year make to electronic document management one of their core competencies. "In the future, we believe that the networked world will demand that documents move as quickly over the net as simple data does today."
Topping The $20-Million Mark
"Patronage is investment," Karnes told shareholders. "In 2006 we'll top the $20-million mark in annual revenues. It only follows that in the next five years CUs will spend over $100 million on technology through CU*Answers. More importantly, this is applied investment-spent in the execution of CU business plans-invested to meet their goals."
The software "blueprints" of CU*Answers and RDI will be merged into one to make a comprehensive ASP based paperless solution in electronic document capturing, archiving and managing. Then, feedback from owner clients will allow CU*Answers to influence the priorities in development of features and functionality. "As more and more transactions become digitally based it only seems to follow that digital capture and displays will become more common. The credit union will become as familiar with the digital image of a receipt as they are with the physical image of a dollar bill; it will become second nature. This partnership will bring this to fruition. However, partnering is only the first step; merging our technologies will complete the task. After all, the best you can buy is not what you can use today but what you can build in the future."
The combination of the CU*BASE GOLD system and DocLogic2 (the advanced electronic document archive and delivery suite) will manage and secure member information. The idocVAULT will play a role in connecting CUs to members and the places they shop, invest or receive other services. There will also be facility and personnel sharing which will give clients better service. Product integration for CU*Answers clients is already under development, said Karnes. A seamless installation process is scheduled for delivery in the first quarter of 2007 and no client will be left behind due to access or prohibitive pricing, he pledged.
Karnes and the CU*Answers team would like these partnerships to serve as an example of the muscle credit unions can command through the practical realization of CU philosophy. It's not based on a vendor strategy to take over the credit union marketplace; it rather makes credit unions the real benefactors. They get products that are independently proven in the market, they get to dictate what features and functions are prioritized, and they share in the benefits of the successful enterprise. That's a valid model all CUs can aspire to, as it serves members best, Karnes believes.