CUs Slash Costs By Banding Together, Sharing Software
A credit union technology-sharing "underground" has helped revamp a third-party bill pay platform at $85-million Central Coast FCU, delivering full functionality and increasing payment volume seven times.
According to Michael Blanksma, operations officer at Central Coast FCU, it now "has all the bill pay services that members were screaming about."
Members at the 13,000-member CCFCU can now set-up new payees online, modify payee records, schedule recurring payments and set payments ahead of time. Members had been "dissatisfied with bill pay because it was so limited," Blanksma said.
Before additional functionality was enabled in March, the only type of payment permitted on the three-year-old service was next-day payments. In addition, members had to contact the CU to set-up new payees.
Concerned about the costs associated with asking his bill pay provider to develop an advanced interface, Blanksma e-mailed the provider's users group asking if anyone could help out.
A Sacramento, Calif.-based credit union answered the call. "First US Community Credit Union shared its bill pay interface and we installed it on our system. It was everything we wanted and has caught on very quickly with members," said Blanksma.
Jance Dalton, IT manager at First US Community CU, wrote the interface that provided full functionality on the $140-million CU's existing bill pay platform, which is the same as Central Coast's.
Advanced functionality may have had an effect on adoption at both credit unions. In the two years since Dalton created the interface, the number of bill pay users at First US Community has more than doubled to 600 users, according to Dalton. The 11,500-member CU has 3,000 homebanking users, he said.
Central Coast's bill pay volume shot up to more than 700 checks per month, from 100 checks per month. "The increased volume just blew me away," said Blanksma.
About 30% of Central Coast's 1,600 homebanking users are also using bill pay, Blanksma said. Both credit unions offer bill pay services free-of-charge to members.
Technology-sharing is par for the course in the credit union community, according to Blanksma and Jance Dalton, IT manager at First US Community.
"I do a lot of code-sharing," Blanksma continued. "If I'm doing something I think is really neat and is a timesaver, I put it out and ask if anyone wants it. It's 'I'll scratch your back if you scratch mine.'"
Blanksma estimates that Central Coast FCU has shared technology with about 10 CUs nationwide. "The key factor is that the credit unions should be on the same core system," Dalton said. In other words, 'Vendor X' code works best with 'Vendor X' code.
Competing CUs will also work with one another, Dalton continued. "We've shared quite a bit, even with credit unions with overlapping FOMs." First US Community has swapped report generator code for job file configurations with a local CU, said Dalton.
Larger credit unions usually pass innovation to smaller CUs, Blanksma and Dalton added. "Smaller credit unions are especially happy to share," Blanksma said. "They don't have the resources to pay someone to develop code. "More often than not, I get what I need without shelling out the bucks."
Indeed-First US Community CU's vendor charges up to $150 per hour for programming, Dalton said. "I daresay it would have been 20 to 30 hours of programming time for the bill pay interface," he said.
"It's better to send out a query to the users group and try to subvert the high provider prices," said Dalton.
Dalton added that his bill pay and core system provider endorses technology-sharing amongst credit union clients by sponsoring users groups and participating in bulletin board discussions.