MURRIETA, Calif. -
"We're getting flooded with requests for assistance with mergers," explained Ron Murray, president of CUTEK, a financial technology, consulting and programming firm for credit unions running Symitar's Episys core system. "It's serendipitous."
Actually, it's no wonder. Credit unions continue to merge, with an average of a little less than one credit union per day disappearing. And Wings Financial FCU in Apple Valley, Minn., is raising the stakes as it tries to woo Continental FCU members, invoking "takeover" paranoia among many of the nation's CUs.
The fever pitch is good news for CUTEK, according to Philip Hunt, CFO at KEMBA Financial CU in Gahanna, Ohio.
"Mergers will become more prevalent, and full-service merger tech will be in demand," said Hunt. "Credit unions may look to CUTEK as an alternative to the monopoly of their own data processors."
Credit unions don't always have the time to wait in line for their data processors to help them, and data processors don't always have the know-how. Hunt explained. For example, KEMBA's core system provider, Symitar, ran into significant tech challenges in a recent merger.
"We ran into very complex home equity product that we needed to convert from the merging credit union into Symitar," he said. "Our home equity product was substantially different. Theirs had caps, floors and unusual pricing points. CUTEK was able to help us."
But complexity wasn't the only factor, said Hunt. "No other merger services firm could have touched our three-month conversion timeframe. Even if Symitar could have figured it out, they wouldn't have been capable of doing it even in six months."
Although KEMBA normally requires CUTEK's help solely with niche portions of merger tech, Park Community FCU in Louisville, KY, worked start-to-finish with CUTEK during its two recent mergers-and will do so for its forthcoming merger, which has a 30-day timeframe, according to Steve Moore, vice president, information technology at the $338-million CU.
That means CUTEK transforms the merging credit union's data into usable format for Park Community's Episys system. "They're usually packed data files that are a mess to work with," said Murray.
The usable data is then mapped into the appropriate Episys fields, which is the most time-consuming part of the merger process from a tech standpoint, Murray said. Meanwhile, CUTEK sits down with Park Community and the merging CU in a consulting environment to discuss the meaning of the data and how it might best fit the Episys system, Murray continued.
For Park Community, the partnership is a good deal. "In the past we have had Symitar write the conversion programs, and we wrote ad hoc programs to perform any cleanup or credit union-specific tasks," said Moore. "That worked great, but the costs were a little high. CUTEK was able to step in at a lower cost."
The merger tech business has come as a bit of a surprise to CUTEK, Murray said. "We're kind of being forced into providing a merger services suite," said Murray. "KEMBA called and said it just didn't have the time and resources to do a recent merger. Not long after that, we started getting calls from other credit unions. It's too late to put the cat back in the bag." CUTEK, which focuses mainly on custom programming, completed six mergers in the final five months of 2006, Murray said. Since then, the firm has agreed to complete five more and is talking with four prospects, he said.
CUTEK plans to extend beyond the Episys system to help with mergers into a range of data processing platforms, said Murray.
FOR MORE RESOURCES
Read more about system conversions at cujournal.com and search the following bolded terms in the archive:
Mergers: The Do-Nothing Option Is Gone Forever, for an opinion piece on unsolicited mergers.
The Driver: Where The Keys Lie For What Happens Next, for perspective on unsolicited mergers offered by Chip Filson, CEO of Callahan and Associates.
Technology Divorces: Why So Many CUs Break Up And Then Make Up, for a story about CUs that have second thoughts about core system conversions..
FOR MORE INFO ON THIS STORY
* www.kemba.org
* www.parkfcu.org
* www.cutek.net
