Does anyone remember the Betamax? Although this Sony videocassette recorder was the first on the market, the VHS format-not the Beta format-became the industry standard.
That meant a salesperson couldn't carry a Beta tape into a client's conference room and play it on any VCR. The home movies created in the Sony format couldn't be sent to the grandparents, unless they had a compatible machine. Consumers and business users soon caught on: standardization gives them more flexibility, more freedom and is a better technology investment. And the Betamax became history.
Now, think about your core system. If you've been in the industry for a while, you probably remember the days when you had a core, and maybe two or three applications. Today, multitudes of third-party vendors are on the scene, with solutions for Internet banking, ATMs, document management, CRM, EFT-all the services you need to keep your credit union competitive, improve member service and streamline operations.
In the past, if you wanted the freedom to choose a variety of providers, you had the potential to create an integration nightmare, because each product was written in a different protocol. Integration with the core, if possible at all, took reams of code, significant downtime and all those efforts still couldn't guarantee results.
Today, credit unions have another choice: open connectivity through XML Web Services. These web services can be used as an industry standard Application Programming Interface set for processing transactions with virtually any application on the market.
Open Connectivity
This open connectivity enables your credit union to choose the hardware and software solutions that work best for your needs, regardless of the provider, and have it all work with your core system. This vendor-agnostic approach reduces the cost of development while protecting your long-term investment in technology.
But, all open connectivity solutions are not created equal. Credit unions should look for web-based solutions that function above the business layers. This process ensures that all transactions flow through your pre defined business rules, and that all the information remains safe and compliant.
The right connectivity solution gives credit unions the flexibility to add on applications at your own pace and on your own terms-with pre configured industry standard interfaces that you, your third-party vendor, or your core provider can modify. The benefits are significant.
Open connectivity gives credit unions the flexibility to introduce new products and services more quickly. For example, one Texas-based credit union was able to launch three new third-party vendor products within a six-month period using an open connectivity solution, including the online opening and funding of accounts.
Streamlined Solution
This streamlined solution eliminated manual processes and cut staff processing time in half. Most important, it worked to increase online account openings by 45%.
Standardized open connectivity also gives credit unions the ability to preserve their investment while still taking advantage of the latest technology quickly. For example, if a credit union wants to maintain its current document imaging vendor, but make a change in the card vendor two months from now, the right open connectivity solution ensures all of these diverse products integrate with the core system.
As changes are made, these new vendors become part of the total banking system without downtime.
Whether you're working with your core solution provider or a third-party vendor for your open connectivity, make sure they have the right tools and safeguards in place. Documentation should be easily accessible online, and updated frequently.
They should have a working evaluation site that enables your development staff and third-party vendors to review available web services and to access a comprehensive Software Developer's Kit.
Ideally, they should also offer a community website that provides a secure place for your providers to share information, best practices and find the information they need.
Today's ever-changing financial environment requires agility, dynamic decision-making and technology that quickly changes with your credit union's needs.
Standardized open connectivity solutions, with built-in security features, enable you to streamline operations, choose the products that work best for you and seamlessly, painlessly integrate these with the core-without downtime.
It's the best way to future-proof your investments and position your credit union to compete. Standardized open connectivity keeps you open for business-and going strong.
Peter McKellar leads Product Development for the Credit Union Core Systems business of Harland Financial Solutions. He can be reached at peter.mckellar
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