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CHAMPAIGN, Ill. – A database and negotiating skills have helped the University of Illinois Employees Credit Union save some $20,000 already this year in a new deal with its debit card processor, with more on the way. The $140 million credit union is using the ExpenseMark sourcing and procurement service from BSG Financial LLC of Louisville, Ky. The service combines a growing database and analysis of a client’s spending patterns and business processes to identify where savings can be had, and then offers negotiating services to go out and get them. Credit unions are particularly ripe for savings, the company’s founder says, because they typically have so many more members per assets than similar-size banks do customers. For instance, UIECU has about 32,000 members, while a typical $140 million bank might have about 8,000 depositors, says Barrett Nichols, founder and CEO of BSG Financial (www.bsgfinancial.com). “So if we can get a better deal for a credit union in a key area, such as ATM or debit card transactions or consumer check purchases, these things are very sensitive to the number of accounts you have, and generating real savings is like picking low-hanging fruit,” says Nichols, whose company also offers overdraft software, electronic check recovery and other services. The ExpenseMark program has about 150 financial institutions on board, including a couple dozen or so credit unions, Nichols says, and uses a growing database of vendor and financial institution price histories and relationships to analyze “more than 40 cost impact areas customizable to each financial institution.” “We’re in a unique position to gather data from vendors and financial institutions of all different sizes all over the United States and to know what’s available,” says Nichols, a senior executive with PNC Kentucky and PNC Indiana before founding BSG Financial. “Our database is the technology part of it. The human interaction comes in representing our clients to vendors,” he says. Of course, price is not always the deciding factor in going with a particular supplier. There can be relationships to consider, including at UIECU. “They proposed three projects to us as areas where they felt they could save us money,” says Jennifer Peyton, vice president of finance and human resources at the Champaign-based CU (www.uiecu.org). “We actually were pleased to see they only found three, since that indicated to us we’re doing a lot of things efficiently. “They were able to work out a deal with our current debit card processor that has saved us about $20,000 so far this year, but we decided not to take their advice on another proposal of theirs, because we simply felt like it was more important to keep that existing relationship,” Peyton says. Nichols says that’s not unusual. “Sometimes, especially in rural and smaller communities, these vendors are customers of the bank or members of the credit union, so you have to be sensitive to that,” the BSG Financial CEO says. The third area that the ExpenseMark service identified for UIECU is official check processing. A new vendor is going to both reduce expenses and help reduce the potential for fraud by providing daily Web-based reports of cleared official checks rather than monthly statements, Peyton says. Nichols says another volume-oriented area, along with office supplies and general administrative functions, where his firm sees potential savings is in the consumer check area. “There’s a lot of consolidation taking place in the printing industry and good timing can really help,” he says. “Often times we can go in and find that the vendor is willing to extend some extremely advantageous deals if the institution is willing to extend the contract for a year or two.” Nichols says of his firm’s dealing with vendors, “they don’t particularly like to see us coming, but we do have a relationship with them and they do get business.” At UIECU, Peyton says, “it’s worked pretty well for us. We’re one of the smaller credit unions they’ve worked with, so it can be harder for us to get economies of scale from larger volumes, but they have helped us.” -

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