WEST PALM BEACH, Fla. – With credit unions now having access to SBA's 7(a) program, the heat is on for data processors to deliver the tools credit unions need to serve business accounts. Some vendors had a headstart in this arena because their roots are in banking and they have bank clients. These include Aurum Technology (spun off from EDS) and Open Solutions Inc. But there are other CU core processors that are developing a reputation for delivering business functionality or on the verge of rolling out extensive functionality. These include Symitar Systems, which is owned by the large bank processor, Jack Henry, and ULTRADATA, another former independent processor that now has the backing and resources of Harland Financial Solutions. "We have a suite of commercial products. Many of them are not add-ons for our credit union clients. We may charge to set it up and train them but the module itself isn't an additional fee," said Esther D'Albero, a product manager for OSI. OSI clearly has one of the most extensive product lines for serving business, including sweep processing, account analysis, commercial participation, SBA processing, positive pay, commercial lending, online cash management and others. D'Albero said OSI's mortgage processing and escrow processing abilities have been an advantage since credit unions will be making more commercial real estate loans. D'Albero and fellow product manager Lizette Nigro both hail from the banking world, so they know the ins and outs of what business clients want, and probably the most important distinction credit unions will learn about serving business accounts as opposed to consumer accounts, is the business side requires a lot more flexibility, said Nigro. "When you get into the business side of the house, it gets to be very creative. Competition is very keen so they (credit unions) need to be more creative, more aggressive on their rates, deposit balance requirements," said Nigro. One size does not fit all on the business side, she said. Credit unions have to tailor fees (which are much higher on the business side), and loan structures for businesses based on many factors. Relationship pricing is much more common for business accounts than consumer accounts in the banking world, said Nigro. This is why account analysis was one product all the vendors touted as key for credit unions to effectively serve their business accounts. "You have to determine the profitability of the business account. The way to do that is to take all the accounts that are part of the business and calculate the dollars generated," said Prasad Janardhanan, Commercial Product Manager for ULTRADATA. So, for example, if a business account has $100,000 in a CD, and conducts many fee-generating transactions, maybe the credit union can waive certain fees or offer a better loan rate to keep that account happy. This works both ways. Some accounts might get higher fees and rates. Being able to do this comes down to seeing all that a business account does in the system, and being able to analyze it and make pricing decisions accordingly. ULTRADATA's Stephanie Shaw, VP of Marketing and Product Managment, said this is one area where ULTRADATA will rely on Harland's established CRM products. That relationship management functionality of products like Touche can be tailored to business accounts as well. Credit unions will also want to see what their DP provider has in terms of compliance with SBA loans, which require frequent reporting (Colson reporting) since they carry SBA guarantees. Compliance in general for commercial loans varies from state to state. ULTRADATA's system is integrated with Laser Pro Lending for the most up-to-date legal forms and compliance documents. "It's a solution that over 75 of our credit unions are already using. It's not a new thing," said Shaw. She said credit unions can't discount the importance of collections when serving businesses. "The collection side is going to be critical. These are large loans, typically these are going to be participatory. The collection modules have to be fully integrated into the lending pieces," said Shaw. "The key is to have access to all the data. With Harland, we're just pushing back and forth integrated data," said Shaw. Aurum's MISER product wasn't available to credit unions until just two years ago because the company evolved out of EDS' community banking division and had not yet segued into credit unions. But those banking roots are paying off now, said Santo Cannone, president of Aurum's MISER Division. Aurum has already picked up some of the nation's largest CUs as clients. "MISER has business banking capabilities that are increasingly important to credit unions. It has significant scalability. Green Point bank, for example, at $20 billion, is running on the product," said Cannone. Aurum is pushing ViewPoint right now, a product that allows a credit union to look enterprise wide through a single browser-based interface without ramping up hardware to see what members are doing. It's geared for credit unions with multiple branches and using multiple channels. Cannone said ViewPoint also works with its business capabilities. "On the cross-sell side ViewPoint maps into our business intelligence suite, Smart Banker, to give the credit union the ability to analyze member data any number of ways, including channel reports and risk analysis," said Cannone. Some of MISER's business capabilities include business deposit processing, business loan servicing, business construction loans, business loan origination, cash management, Net banking for small businesses, payroll cards and others. One theme being echoed by the data processors is the ability to be a one-stop shop for credit unions' business needs. In recent years the talk has been about open systems that allow CUs to pick and choose from best-of-breed vendors, but that may not be the best method in this case, said Symitar President/CEO Bruce Cormode. "Deploying best-of-breed solutions for multiple applications within your credit union requires a substantial commitment of time, money and highly skilled technical staff. It's expensive all the way around," said Cormode. "When you balance the incremental gains you're likely to realize, and then consider the things you give up by opting away from an integrated solution, best-of-breed really isn't the best choice for many credit unions." Cormode said credit unions want critical data processing functions built directly into the core system. "That's why we're just now entering into the third and final phase of an intensive project that will bring full commercial account capabilities to our Episys core system. We felt that this is the only approach that does justice to our clients," said Cormode. Positive pay is one of the must-have products vendors believe CUs will need to effectively serve business. Positive pay is essentially an automated way for the credit union to verify checks, an important process for businesses where cash flow is king. "When you start processing these businesses' checks, it's too timely, teller lines get backed up," said OSI's Nigro. OSI offers a Positive Pay component as part of its core system. "We check every single check that clears that it is clearing for the right amount, clearing within a date range acceptable for the commercial client. As credit unions go upstream in the commercial arena, that will be very important," said Nigro. Other obvious must-have products include cash management, sweep abilities, ACH services, and even overdraft protections, which are growing in credit union land. [email protected]