CU Journal Technology Panel

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What would you advise our credit union to ask Santa for this year in terms of implementing a new or developing technology solution, or strategy for redeploying an old solution in a new way in 2004?

Terry Treadwell, Summit Information Systems, Corvallis, Ore.

Ask Santa for new tools that can transform information into effective sources of servicing, cross selling and growing your member relationships.

Each day a wealth of information from multiple systems and sources-the Fed, payroll groups, credit bureaus, third party applications, etc.-flows through a credit union. Often the information is inadequately shared throughout the credit union.

By using web services, XML and other new tools, credit unions can access multiple applications within a single framework that seamlessly integrates information from different sources with the core processing system and displays it in intuitive screen formats easily used by employees and members.

A single framework environment enhances productivity. Time-saving capabilities such as integrated web browser-based member delivery solutions that minimize redundant processing and eliminate the need to learn and navigate multiple systems, a single sign on and pre-filled applications to help employees "get where they are going" with one click, role-based access and intelligent screen-mapping capabilities that generate info based on staff responsibilities may be implemented throughout the CU.

Finally, be sure to ask Santa for an enabled framework that is trusted and true. Specify technology based on standards that are accepted and used throughout the industry. As an example, the Summit open core processing solution and many best of breed applications use web services and XML standards to simplify the sharing and integration of information among diverse systems.

With the framework in place, the credit union can transform information into opportunity.

Frank Sanchez, Sanchez Computer Associates, Malvern, Penn.

If Santa had a special holiday tech message for credit unions, he would offer one word-Linux. Having already opened roads into financial services as the operating platform for "edge" applications such as file, print and e-mail servers, Linux is ready to provide financial institutions with a low total cost of ownership for hosting core customer and transaction processing applications-without compromising scale or security. Worldwide, one industry research group has reported that 8% of financial companies have completed some type of Linux implementation and 15% are considering some type of Linux implementation. Innovative institutions looking to dramatically reduce their operating costs will find Linux a strong and extraordinarily cost-effective platform alternative to traditional mainframe, and even Unix-based solutions."

Stephanie Shah, Harland Financial Solutions,

Pleasanton, Calif.

2004 identifies a time for credit unions to look at opportunities in which they can extend technology and leverage the benefits of current investments into the future. With technology that can open up a credit union's system to limitless future possibilities, this can be accomplished and is the best investment for 2004 and beyond. With industry-standard technology that enables the integration of the host to virtually any application, whether internal or from a third-party provider, a credit union can truly reap the benefits of the vast technology choices available to financial institutions. This strategy provides credit unions the ability to continually develop ways in which to better serve their members, provide more products and services to members, and streamline their operations' internal efficiencies.

Harland Financial Solutions, for example, enables full access to the ULTRADATA System host through the use of web services, delivering that data and transaction sets to any solution via industry standards. This technology is truly the gift that keeps on giving!

Rick Fleming, Digital Defense, Inc. San Antonio

What to ask Santa for? This question has plagued boys and girls (and CU CIOs) for years. Should I ask for more toys? A new server, firewall or network switch might be nice. I hear Microsoft Server 2003 is all the rage along with the companion set of Word, Excel and PowerPoint. Oh, what to ask for?

All humor aside, there have been some trends in the IT arena that every credit union should spend resources addressing: the increases in variety and danger in viruses and worms. Regardless of the size of the organization, we've all been affected by viruses and worms attacking our systems. The Slammer worm spread at an unprecedented rate, taking massive networks down. Even the once protected ATM networks are now at risk from the likes of Blaster and its evil child Nachi. The frustration for IT personnel isn't that they are doing a bad job-they are in fact doing an admirable job-but that each new vulnerability identified leads to a whole swarm of other vulnerabilities. As soon as these are patched, even more appear. This process continues with the IT staff struggling to stay ahead of the patches coming from the software vendors.

In addition to spreading quickly to all types of networks, these viruses and worms attack through newly discovered security holes. IT staff are also faced with the challenge of trying to identify where their systems are vulnerable. Every day new vulnerabilities come out that allow hackers to gain key knowledge or access to CU systems. Many simply don't have the staff resources to deal with all of their security testing.

However, there are many credit unions that simply don't think they are vulnerable. They feel they are simply too small or don't have the resources that a hacker would be seeking. The truth is, hackers are notoriously lazy and will go after the low-hanging fruit, especially if they think it's a small organization that probably doesn't have the resources to fix the problem. Other organizations feel that if their NCUA regulator isn't pushing them to get secure, they shouldn't bother with it until it becomes an issue. Unfortunately, this is leaving valuable member information at risk for loss or compromise. The cost of not securing them can be even higher than the cost of securing systems.

What do I think your readers should ask Santa for? For the budget and personnel resources to secure the networks that contain member financial information. It also wouldn't hurt for Santa to toss in a bag of patience to deal with all the new viruses and worms that will surely come out in 2004.

John Edwards, XP Systems, Moorpark, Calif.

As the primary financial services provider for thousands of people, a credit union needs to seriously consider investing in real-time, redundant mirrored systems. In the best scenario, those systems would be remote to each other so the total loss of a facility wouldn't interrupt processing. Technology now exists where redundant systems can be physically separated and will automatically, seamlessly stand in to employees and members. Credit unions have typically been reluctant to make the investment, but as some are learning the hard way, it may be penny-wise and pound-foolish not to make this investment. It's up-time and disaster recovery all rolled into one.

Another item high on the wish list should be implementation of more risk-based auto-decisioning tools. Credit unions need good systems for making instant, informed credit-granting decisions on a 24/7 basis.

Todd Zerbe, COCC

I would ask for system integration and for vendor cooperation.

First things first: System Integration

Behind every core system is a challenge called: "system integration." Most operations folk know the value of integration too well, particularly when they are waiting for the next "download" from "System A" to be processed in "System B." There are real savings in the ability to efficiently see all information on all members from any system in the credit union.

Technologies are available to help computer systems talk to each other more efficiently. One of the leading contenders is XML or "eXtensible Markup Language" which provides a set of rules that define how computers communicate. XML's rules enable computers to share information without regard to the systems' specific hardware and software. This will enable your credit union to take advantage of any new product by simply buying and installing it with significantly lower integration costs.

The challenge for credit unions in the years ahead will be to get their disparate systems to work together in real time. XML and the system integration it brings will be a prerequisite for meeting member service expectations in the future while maintaining financial stability.

Secondly, I would ask for vendor cooperation well beyond the holiday season. Consider your vendors to be part of your institution, and tap them with questions about products and services. You won't find better allies and resources! The right vendor will save your CU money and effort while delivering the most advantageous product.

John Schooler, USERS, Inc., Valley Forge, Penn.

One of the greatest technological challenges that credit unions will continue to face in the coming year is the fact that they have many different networked applications and systems that don't necessarily interact, and that certainly don't share a common database. The more systems your staff has to touch to complete a process, the higher your labor costs and the greater the potential for error. Just think about opening a new account; it might mean using separate systems for OFAC compliance, Patriot Act compliance, check ordering, signature card creation, plastic card issuance, credit bureau inquiry, Internet banking sign-up, even loan origination. And thanks to the growing threat of fraud, it often takes more steps to do what you once did with a good deal of trust. Besides the inefficiencies, this scenario also creates member service issues: As members interact with service channels requiring different systems and databases-some updated in real-time, others in batch-they inevitably see discrepancies in their data from one channel to the next (fueling more inefficiencies through higher call volumes).

Given this situation, you should ask Santa for Enterprise Application Integration (EAI)-the intelligent sharing of data and business processes among different applications or sources of data. For EAI to become reality, system suppliers will need to step up to the challenge and integrate these disparate systems into one, unified system-providing the seamless, complete view of data that's needed to reduce labor, improve accuracy, and deliver excellent service.

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