Ties That Bind: Ohio CU Nears 30 Years With Original Core Processor
NEW PHILADELPHIA, Ohio -- Bob Olmstead and Dave Andreatta have gotten to know each other over the years.
In fact, it would be hard to find a longer credit union manager-core processor owner relationship in the business.
Olmstead is the founder of R.C. Olmstead, a suburban Columbus provider of core processing and other services to about 115 credit unions.
Andreatta is the president of Dover-Phila Federal Credit Union and became Olmstead's second customer not long after the company began business in 1978. (Olmstead still has its original customer, too, which through a merger is now Lan-Fair FCU in Lancaster.)
Originally serving a single manufacturer in New Philadelphia, Dover-Phila FCU now has a countywide charter and about 33,000 members in a service area of about 90,000 people. The credit union had $2 million in assets when it hired Olmstead and now has about $265 million and five branches.
"They're the second-biggest depository in Tuscarawas County and have quite a large membership considering the population," Olmstead said. "We really feel like we've grown up together."
Olmstead and Andreatta really got to know each other when Olmstead spent a weekend in New Philadelphia back in early 1979 programming the little credit union's new system.
Things have changed a bit since then. "We really don't need much help like that anymore," Andreatta said. "It used to be Bob and I would do everything together, but now he has a company, and I've made IT hires."
Nowadays, RCO runs its core offering on an OpenVMS system from Hewlett-Packard, a platform that, like RCO, is celebrating its 30th anniversary this year.
Open technologies allow the use of modules, such as enhanced online banking, collections and CRM tools, to be developed by RCO, and third-party add-ons are offered from such vendors as iPay Technologies for bill pay, Elan for debit cards and Vysym and Maxxar for voice response.
RCO also is looking at third-party providers for additional services, including mobile banking.
That's a service that Olmstead said he's not had a lot of demand for yet from his client base, including Dover-Phila FCU.
"We watch our expenses and don't want to spend large dollars for small gains in services," Andreatta said. "But we are making an effort to add Gen Y's to our membership, so mobile banking will be something we add in the future."
Olmstead also likes that approach.
"Dave has done a good job of balancing the right amount of technology deployment he needs to provide his members with a good, solid product selection at an effective cost to the credit union," the RCO founder said.
And while no two clients are alike, Olmstead said, "I feel my clients have changed as the industry has changed. It's a good cross section with some more robust than others in terms of their product offerings to members but a lot of emphasis on providing 24/7 access through a lot of channels."
Dover-Phila FCU is Olmstead's largest client and of his own 42-employee company, he said, "I feel like we're large enough that we can be a surviving party in the industry, and if anything, it gets more fun each year. The exciting part to me is looking to the future."
"Credit unions have avoided a lot of the traps that some banks have fallen into, and they've stayed closer to their members, so that's helped a lot, too. And we'll keep looking for ways to help them gracefully move into the future."
That includes looking for new partners when necessary. "We're not going to reinvent the wheel when there are very good, mature applications out there with good pricing," Olmstead said.
And enjoying the old ones. "We drove down some slippery roads that winter of 1979," Olmstead said. "But Dave's credit union has certainly prospered over the years and we've done well, too."
Andreatta added, "Maybe we'll retire together. We're within a couple days of the same age as each other. Or maybe we'll be crusty 90-year-olds still at it together."
And while friendships are good, the bottom line is still business, and Andreatta said he feels Dover-Phila FCU has done well in that regard.
"This year our ROA has been around 1.7%, in a tough market, and we've always been around one, and that's with returning dividends now for 13 years," he said.
An economical relationship with its core infrastructure provider has helped, he said.
"I was just reading an exchange on the CUES site and one of the questions was about changing core processors," Andreatta said. "We pay around $300,000 a year for computer services, and this CU was paying close to $400,000. Their size was $36 million with about 6,000 members." That's about one-sixth the size of Dover-Phila FCU.
"I don't have access to everything that I might if I was with a Fiserv, but we have what we need, and I've always felt that RCO gives us good service at a reasonable price," he said.