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MOORPARK, Calif. – In the intensely competitive credit union data processing space, any new credit union client is exciting for processors, but some wins are sweeter than others. For XP Systems, it doesn’t get much sweeter than the signing of the $3 billion Digital Federal Credit Union, Marlborough, Mass. DCU is one of the nation’s most tech-savvy credit unions and typically experiences above average growth each year. “It’s new ground for us because it’s the first time we entered into a co-development agreement with a client. We haven’t defined yet what that will be, but they are going to be working on some projects with us. That’s exciting – to have someone who is high-tech and on the leading edge developing with us,” said XP Systems President John Edwards. As part of the deal, DCU’s highly-skilled information systems staff will be freed up to work more on developing ancillary products for the XP core. DCU is currently on a re:Member Data system, which was acquired by Open Solutions Inc. For the last seven years, DCU’s IT staff hasn’t used any of re:Member Data’s core system upgrades – it has made system changes on its own, quite unique in today’s environment. “We use a lot of resources today just to maintain RDS with compliance, regulatory, tax changes, and other areas. Clearly this will enhance our ability to become even more innovative,” said DCU Vice President of Technology Kris VanBeek. VanBeek is excited about what this will mean on the programming side. Currently DCU is split between core and non-core programmers. Core programmers are more legacy oriented and program in proprietary languages or Pascal. Its non-core programmers are .Net and Java. “As part of the partnership and the new XP2 system we will not have to segregate the groups as they are today. We will be able to allocate resources between core and non-core based on business priorities. We will have a uniform modern programming team and at times be an extension of the XP teams. It will be a refreshing change and allow DCU to execute even faster,” said VanBeek. VanBeek has been with DCU for about two years. He said about a week after he was hired, OSI acquired re:Member Data and the CU’s management decided to look at converting systems. “It wasn’t exactly what I wanted to do having just been hired,” VanBeek joked. DCU went through a year and a half of “soul searching” as VanBeek put it before deciding on XP. He cited XP’s rock solid database system, XP’s coming XML-based API interface that will allow DCU’s IT staff to develop its own applications, as key tech reasons for the selection. “We do a pretty good job as far as automating interfaces. What they’ll allow us to do is custom development using message sets within the system,” said VanBeek. He said DCU is hoping to further leverage its current development work. “We have developed a variety of systems internally and within our software subsidiary CUSO FiVision. Our plan is to leverage these projects with XP so they can adopt them and potentially offer them to their full CU customer base,” said VanBeek. Some of the systems include collections, ticketing, CRM and sales. Symitar is one popular system that has spurred a number of tech-savvy CUs to form CUSOs that develop apps off of the Symitar system. Is that what’s happening with DCU? Edwards said he’s not sure how it will shake out. “It’s possible. We’re planning a meeting within the next six weeks with a group of credit unions to put some structure around things. The most challenging part is making sure all standards are adhered to as people develop new features and functions.” Speaking of tight integration, DCU also may utilize XP’s Visanet solution, which allows it to connect directly to Visa. “It’s not for everybody. You need a large card base to do it, but when you eliminate the pass-through processor, the return on investment is clearly there,” said Edwards. VanBeek said DCU is still considering Visanet, but it does plan on using Intercept, XP’s ATM driving solution. “It has been around a long time, but has been rewritten, migrated to a new version,” said VanBeek. DCU’s decision did not come from up high, it was driven by the everyday users of the systems, including tellers, loan officers, member service reps, etc. VanBeek said it was these in-the-trenches users who vetted all the system candidates, and eventually landed on XP. Senior management of course had a say, but DCU wanted its heavy users to be comfortable with it. A team of about 25 reviewed the systems. “Originally we were looking at larger banking systems because we’re a large complex credit union. But our people didn’t care for the workflow, and had some concerns about how it would fit in. Because of that feedback we went with a much more traditional credit union system,” said VanBeek. VanBeek said he personally was impressed with XP’s decision to completely rewrite its old Focus XP system, which has resulted in XP2. He said that showed guts and confidence in their technology. XP2 uses an IBM DB2 database, browser-based applications and .NET technology. “That rewrite made a real bold statement. That’s something I could see DCU doing.” Pricing did come into the decision, but VanBeek said all the candidates were within 20% of each other, so it wasn’t a major factor. “It really came down to what is going to be best five to 10 years out. It’s not about just picking a system today.” But DCU is looking for commercial functionality, something XP2 doesn’t have. DCU is one of the ground floor XP clients participating in XP’s ComCore initiative, which is focused on bringing commercial banking functionality within XP2. DCU and about a dozen other CUs have even provided funding for this effort. “It’s a group of clients who have concluded that they would rather have business services capability embedded in the core, rather than interfacing with an ITI or CBS [two Fiserv products]. What they are doing is really prepaying for the software. We have a marketing agreement with them based on what we anticipate in future business from it,” said Edwards. This means the involved XP clients could even share in revenue from CommCore with XP, a true partnership arrangement that VanBeek said is indicative of the XP culture. “It’s hard to put into words really, but the whole culture thing was huge. XP’s credit union philosophy, support of charities, casual atmosphere and their willingness to talk about things like co-development were all major factors that helped us feel more comfortable. Some other vendors were hard and fast,” said VanBeek. VanBeek used to work for Fiserv’s ITI group, and said he knows all the good and bad about Fiserv, but in the end the good wins out. “Let’s face it, it’s almost like the old IBM adage. There’s a little bit of a confidence factor in their financial power and their reputation,” he said. [email protected]

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