Mass. CU Touts Relationship With Member-Owned Firm

Brockton Credit Union says it has what every credit union wants in a vendor relationship: an outsourcer that is at once understanding and flexible.

"Our relationship with Connecticut On-Line Computer Center has been successful for two reasons," said Jim Blake, president of $1-billion Brockton CU. "COCC absolutely understands the meaning of a strategic relationship, and it is extremely flexible and responsive-it's almost like COCC seeks out a challenge. It's almost like having an in-house shop."

The 90,000-member CU has grown to $1 billion in assets from $427 million in assets in its nine years with COCC, a member- owned company that provides enterprise processing solutions for community financial institutions in the Northeastern U.S.

Flipping The Switch

The relationship is still growing. This fall, Brockton CU and COCC will flip the switch on a new core processing system after a year's worth of preparation, bringing Brockton into the age of open architecture on COCC's INSIGHT client/server core system.

"COCC is migrating us to an open system, and that's a major shift for us," Blake said. "They have done terrific work in explaining to everyone in the organization the benefit that INSIGHT creates for us in the future."

Bolstering the CU's IT infrastructure will bring many benefits, said Blake. Among them is the ability to create detailed member profiles and easily track transaction sessions to strengthen member relationships.

COCC also pulls its weight by allowing the CU's Information Services department of six to focus on internal systems instead of on core processing or Internet systems.

"As a result, our internal software systems are absolutely state of the art," Blake confirmed.

A case in point is Brockton CU's automated mortgage origination software, which Blake said has helped the CU establish a loan volume in Plymouth County that is second only to Fleet Bank.

And Brockton CU has expanded its auto loan volume by integrating a fax server with an electronic loan application. Handwritten applications are faxed and automatically displayed on the same screen as the electronic form for easier data entry.

COCC transfers mission-critical knowledge to Brockton CU employees, Blake added. "COCC is spending enormous amounts of time working with our staff to make sure they understand the core system migration process and the extent of new features that are available. Beyond that, COCC is encouraging staff to ask questions about what might be available."

Avoiding The Pound Foolish

Though Blake couldn't put a number on the cost efficiencies afforded by the relationship, he said that Brockton CU's data processing costs are "consistently lower than other credit unions'."

Industry analysts such as Cambridge, Mass.-based Forrester Research, and Cornerstone Advisors Inc., of Scottsdale, Ariz., recently complained that outsourcing has become pound-foolish for financial institutions, and challenged core processing vendors to ante up by delivering substantial efficiencies.

For 13-location Brockton CU, economies of scale provided by COCC have lowered IT costs, Blake said. Expenses are also lower, he added, as a result of the fact that COCC is a member-owned cooperative and "isn't solely profit-driven."

Written communication is essential to the relationship-the two firms put down on paper service-level agreements related to the CU's IT transformation and the resulting cost benefits, said Richard Bastiansen, Brockton CU's senior vice president of operations.

Bastiansen added that COCC reports monthly on system availability, reports availability, statement preparation, network security and internet accessibility.

"COCC also has performance standards that they establish internally," Blake said.

In fact, Blake is so satisfied with Brockton CU's outsourcing relationship that he can only think of one reason not to do it: "An organization might be inclined towards an in-house system if it sees in the future a very specialized niche in the market or a certain degree of uniqueness."

Which doesn't mean that CUs with outsourced core systems aren't unique. "We have turned to our internal software to give us that uniqueness."