McLEAN, Va. – Convergence has become a way of life in the financial services industry, with core processors offering online services and online vendors getting into bill pay as just two examples. But one of the pioneers of online banking doesn't see the lines between the two major categories of technology providers to credit unions disappearing anytime soon. "We don't pretend to be core processors. It would be foolish of firms like us to try to out core-process the core processors," says Matt Lawlor, founder and CEO of Internet banking and payment services outsourcer Online Resources Corp. "It's a totally different skill set. "On the other hand, I know very few core processors who will ever have the depth of understanding firms like ours do of the Internet channel, including the consumer marketing possibilities and the delivery of online services," he says. Lawlor also says that despite the rapid growth and evolution of online financial services, the focus hasn't changed. "It's not about technology. It's about us delivering services to our clients," he said. "We can candy-coat it by calling it a `partnership' and all that, but the bottom line is we're a slave to that financial institution. We exist to serve them." Lawlor also sometimes uses the term "complex technology" instead of "high technology" to define what Online Resources provides its 525 or so client credit unions, banks and thrifts. "Our role is to make the technology simple to use, to disguise it for our clients and members," he says. "And that can be very complex." More and more channels, inside the walls of the credit union and out, have to be integrated into one presentation that's seamless to the consumer. And much of that has to be integrated into vendors' platforms, too, including ORCC's. "That's key to what we're doing, to be able to integrate all that," Lawlor says. "And that's very complex. There are a lot of moving parts. I can candidly say that accomplishing that integration without losing intimacy, the high-touch relationship, with the member, is much easier said than done." Lawlor says his company, an ASP provider which offers what he calls a "perhaps unique" lineup of offerings such as a call center, integrated bill payment and payment settlement along with Internet banking, is proud to say that it has reached profitability, and that he and his staff are now traveling around the country, sharing with clients how they can profit from the online channels ORCC provides. "We call them CEO summits, and these meetings have been a learning experience for us and them," Lawlor says. "We've learned, for instance, that although we've always known that technology starts as a business case, that those business cases are not simple and they vary from one institution to the next," he says. "It's been very eye-opening for us." On the other hand, he says, he was surprised to see "how starved these CEO's were for real, objective information they could use to set strategic goals." With its client base split fairly evenly between credit unions and commercial FI's, Lawlor says he's been able to offer them a range of measures in terms of online adoption rates in their own peer group, among all credit unions, against banks, and so on. It's also helped deepen his appreciation of the differences between banks and credit unions and how that's affected their adoption of electronic commerce options. Credit unions, for one thing, tend to have been more open to remote delivery of services and haven't seen online delivery of services as a "loss leader" as much as some banks have, Lawlor says. "Credit unions have led the way with voice response systems and have been very aggressive in terms of encouraging user adoption of online services," he says. "Of course, they don't have the extensive branch networks that banks do, so they might more naturally look to remote delivery to extend their channel and services relationships," he says. But there's more to it than that. "They're not as encumbered with legacy systems and legacy thinking," Lawlor says. However, they also don't tend to think as much in terms of having a transactional relationship with consumers, and don't cross sell nearly as much as banks do, and that's something Lawlor also sees changing. "It's eye-opening for our credit union clients to see the investment we've made in consumer marketing and CRM capabilities, and to learn what this can mean to them," he says. He says he sees credit unions overall "becoming much more transaction-oriented. They've always been out front in terms of providing information to their members, but they no longer may be as willing to be content serving as simply a provider of loans and repository for member funds," the Online Resources founder says. Internal services like account alerts and cross-selling marketing, and external relationships to provide securities trading and insurance, are just "scratching the surface of this stuff," Lawlor says. For instance, bill presentment might be the next big thing, he says. Indeed, the only constant is change when it comes to technology, Lawlor says he's learned over the years since his company came out with the old screen phone. And it can't be forced down anyone's throat. "It was very tempting along the way to get frustrated sometimes with our clients in terms of their adoption of things," Lawlor says. "But every time we were tempted to stray from our original vision and perhaps go after this stuff ourselves and maybe serve someone other than financial institutions . we didn't." -

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