SCOTTSDALE, Ariz. -
"I don't know of any core vendor that publishes their application programming interface (API) and allows you to view all data and do any transaction," said Carl Faulkner, principal at Cornerstone Advisors here.
And to Faulkner, that's the definition of "open architecture."
Faulkner estimates that about 75% of the dozen mainstream core vendors to credit unions publish their APIs and claim to be open systems, but "that doesn't mean they're open," said Faulkner. "You've got to be able to perform transactions."
The core systems that do allow real-time, automated transactions with third parties only allow a few types, he said.
Open systems matter; they encourage automation, Faulkner continued. For instance, a "closed" core system will silence the bells and whistles of ancillary systems. "An Internet banking provider may say it has all these great functions, but the core system may not, through API, expose the transactions necessary to enable the functions," he said.
And too many CUs accept loan applications over the Internet, but then manually enter the application data into the core system, he said. The same goes for all other electronic channels, such as business banking or new accounts.
The rub: segregated systems ultimately keep members waiting for service.
Fairwinds CU in Orlando, Fla., converted in June 2006 to a core system it considers "open," according to Charlie Lai, chief information officer, though the system doesn't fit Faulkner's definition.
The $1.5-billion CU uses The Complete Credit Union Solution from Open Solutions of Glastonbury, Conn. "The system gives me the choice to decide how I want to run my systems from an application perspective and from an underlying system architecture perspective," said Lai. "Open architecture means the ability to tie uncommon systems into a relational database as well as to pick and choose the technical components we run on," he continued.
"Our clients could choose IBM or Hewlett Packard and Windows or Linux or Citrix," explained Mike Nicastro, chief marketing officer at Open Solutions. "They literally have complete choice of hardware vendors and operating systems, based on their personal expertise."
As a result, Fairwinds doesn't hesitate to pick best-of-breed ancillary products that support the CU's business goals, which include providing members with real-time data, Lai continued. "Otherwise, you have to work with the third-party applications that your core vendor chooses."
In the year since its conversion to Open Solutions, Fairwinds has released a wave of new products "successfully, with little challenge," such as six new checking accounts, including three commercial accounts, commercial banking online and an account analysis program, said Lai.
Fairwinds took it upon itself to quickly interface nearly a dozen best-of-breed applications with the Open Solutions core, he said. Third party systems include consumer lending, mortgage lending, intercept processing and imaging.
Lai's caveat: "Open Solutions won't fit an institution that's just looking for a turnkey technology."
Now the credit union is pushing to deploy two-way interfaces that will get the systems to post transactions to each other in real-time, said Lai.
more
Read more about open architecture at cujournal.com and search the following bolded terms:
Small Arizona CU Cuts Processing Costs, on the open operating system in use at $13-million Hospitality USA CU.
CUSOs Offering Technology Services, on how small CUs are banding together to afford open systems.
Seven New Operating Platforms, for BECU's perspective on open architecture.
For more info on this story:
Fairwinds CU, www.fairwinds.org
Cornerstone Advisors, www.crnrstone.com
Open Solutions, www.opensolutions.com
