Notes from the Bank (even though more than 300 CU folks were on hand) Administration Institute Retail Delivery Show last week in Las Vegas...
* Spoke with two people, both with companies offering substantial core processing systems, who had diametrically different views on the "future of core." Said one person, "Eventually, being a core processor is not going to matter and it's going to go away." But another told me, "Core may be delivered differently, but the things core does never going to go away." Told of those two views, Galaxy's Tim Milz responded, "Core is eventually going to go by the wayside. Innovation is going to be where we have to compete."
* Neither Tim Milz, president of Galaxy, nor Vince Francone, senior VP, are members of Gen X or Gen Y. But that doesn't mean they aren't willing to try new ways of doing things. Francone said he frequently reviews postings on YouTube and LinkedIn and FaceBook to stay in touch with how others are communicating with consumers and each other. He added that he and Milz have even forced themselves to send text messages to each other, even when sitting face to face, in order to get better at that skill. Their self-evaluations? "I can do it well enough to do it," Francone said. "I'm pretty good at it," Milz added.
* The hunger for greater revenue appears to be what's behind the increased interest in credit cards, several analysts told Credit Union Journal, including among credit unions that have previously sold their portfolios and now are spastic over plastic. "Another area for growth is credit card processing," said FIS' James Susoreny. "We have looked at ways of getting people together to buy cards, too. There is a lot of activity there. Credit unions that were dumping cards are now trying to find creative ways to be in that business."
Making cards more attractive, he said, is the fact that card fraud is now under tighter control, and there is great dissatisfaction among some CUs that sold their portfolios with the amount of cross-selling being done to members by those portfolio buyers.
* Former Fed Chairman Alan Greenspan keynoted the BAI show and had a lukewarm at best, view of the economy and what might lie ahead. But that's the nation's economy, and not Greenspan's, where the economic indicators are all up. The rumor during BAI was that he was paid $100,000 for his remarks (BAI was selling sponsorships to companies and a chance to meet with Greenspan with a few clients for north of $95,000.) But one person on the meeting planning committee told me the fee was more than $100,000, and perhaps closer to $200,000, with additional demands for specific accommodations and a private jet.
* The latest and greatest is always on display at BAI's multi-acre trade show. But numerous analysts stressed in separate interviews that there is much m ore value in focusing on the presentest. That is, they should use what they have. As Open Solutions' Gary Daniel observed, "It's one thing to have to have the tools, it's another to use them."
Daniel also had this prediction for credit unions: prepare for some long-loved solutions to begin disappearing. He pointed to all the acquisitions and consolidation of brands within the vendor community by larger players seeking to offer end-to-end solutions.
"Some vendor products are gong to go away with all these acquisitions," he said. "Many of the systems CUs use today are going to go away. It's a matter of when, not if. Companies don't buy other companies to support multiple products."
* Harland Sam Kilmer accurately observed that much of what BAI is about is the trade show, and the trade show is about "gadgetry." "But what we really need to watch out for is what moves you across that bridge is not applications, it's integration."
* It wasn't gadgets, however, that were most visibly on display at BAI, where you could be excused for thinking you were attending an auto show. Various vendors had on display a yellow Porsche race car, a Hummer, a red Ferrari and even a bus. The vehicles helped to jazz up what can seem at times a bit of a boring business to be in, financial services. Fortunately, the Mandalay Bay convention center was hosting another meeting that helped remind it could always be duller: a trade show on fasteners.
Frank J. Diekmann can be reached at fdiekmann
