Credit unions looking to grow their business often turn to commercial and business accounts, but that can be tough going.
Besides sheer check and other transaction volume, there are far more complicated loan instruments, analysis needs, risk and credit scoring and regulatory requirements than the already persnickety demands of compliantly serving individual members.
While third-party products abound, two credit unions–the $408 million Oklahoma Central CU in Tulsa and the $828 million Hiway FCU in St. Paul, Minn.–have turned to their core processors to help them expand their business services in a tough and competitive economic environment.
They’re both now users of the ComCore module offered by Fiserv Inc. to users of its XP2 account processing platform. The software integrates into the core system a range of activities, including multiple loan types from simple to Small Business Administration, account analysis and reporting and loan participation support, along with cash and coin handling options.
Hiway is using ComCore software to help its push into commercial real estate lending, primarily, although the credit union also will do equipment and inventory lending, said Business Services Manager Randy Carlson.
He cited a broad view of consumer and business relationships and the ability to tailor loan types and terms as tools his organization has found useful as it serves its existing members and works in the community for more. Small businesses are its forte, he said.
"We’re always out looking, out on the streets, knocking on doors, and we’re now getting people coming in without us even contacting them first, so that’s a good sign," Carlson said. "Most of them are people who invest in real estate and rent it to other businesses, but we’ve also done restaurants, small businesses and doctors. It’s really run the gamut."
Both credit unions said the ComCore business-specific software helps keep up with complicated matters such as SBA reporting, and also creates new member relationships and retain existing ones. Gina Wilson, CEO at Oklahoma Central, said it’s also helped her credit union participate in boosting the local economy.
"We were instrumental in helping a retail strip center achieve success by financing the project, which is currently at 100% capacity and has created new jobs in Tulsa," Wilson said. "In addition, a software company that provides specialized software nationwide bought a new building to house their home office located here."
The modular design of the software allows clients to tailor their products for members’ needs, said Niles Bay, senior vice president of development for the XP2 platform at Fiserv Credit Union Solutions.
He said the solution debuted late in 2007 with commercial deposit account processing and account analysis, added commercial lending in 2008 and now has 44 users among the approximately 225 credit unions running the XP2 platform. They range from $70 million to $3.6 billion.
"Smaller credit unions can begin with basic account analysis and work their way up to more complex processing. Our largest, multibillion dollar credit unions use the full suite of account analysis options as well as the complex commercial lending and deposit products," Bay said.
He said the ComCore solution embeds into the XP2 core without an additional interface, an integration that Carlson at Hiway FCU also noted.
"I think it’s very valuable to be tied into the core processing system like that, so we can see everything we need to regarding the business that particular member has with us, and it allows us to automate a lot of things we had been doing manually, including activity reports and updating personal financial statements," he said.
Wilson at Oklahoma Central said she liked the ability to manage commercial business separately from personal business and cited in particular the exception tools in the ComCore software.
"Tracking business exceptions can be very cumbersome and costly," she said. "ComCore makes this process seamless. Because exceptions are tracked within the core system, all commercial personnel are notified when an exception is due."
Such functionality did not happen overnight. "There was a learning curve that required training of front-line staff," Wilson said. "It was important they understood that different information was gathered on a business versus a personal account."
She noted NAICS codes as an example. "It was important staff understood those codes, where to find them and where to input them. But with training and the fact that ComCore is user friendly, the learning curve was short-lived."