"It was a disaster of unique proportions that we had no experience dealing with. Because of AFTECH quite frankly, we were one of the first financial institutions up and running in this whole area, and I am including banks," said Rosa.

He said the CU began processing 48 hours after the hurricane hit. "We couldn't even get back to the New Orleans area, back to our building. They ran the system from Pennsylvania on a virtual circuit using our back-up tape. All the hardware we have down here, they maintain there. They were able to take that capability and open up home banking and other channels. If I had 10 vendors doing that, no way it would have been as smooth," said Rosa.

The core processing industry has consolidated dramatically over the last decade. Core processors also have elected to acquire key business solutions. Jack Henry & Associates, Fiserv, Open Solutions, Inc., Harland, and Fidelity Information Systems have all built up their ancillary products by acquiring smaller, niche firms. As their products have expanded, credit unions are finding it easier to do one-stop shopping.

The Single Contact Advantage

Kyle Markland, CEO of the $1 billion Affinity Plus FCU in St. Paul, Minnesota, said his CU values the multiple products Harland brings to the table. Markland believes there are pricing advantages, but he also appreciates the simplicity.

He said credit unions shouldn't have the burden of figuring out all that a vendor offers-that's the vendor's job. "Instead of having multiple support staff, multiple sales and accounting execs, we have one person we deal with at Harland who understands where we are going, understands our needs, and understands Harland. They can advocate on our behalf within Harland, so we don't need to understand the complexities of their organization," said Markland.

He also feels the integration is tighter among Harland products than third-party products tying into Harland's core. Affinity Plus is on the ULTRADATA system. "Harland has more incentive to integrate their products into their system than other third-parties. I don't hide from that, and I don't think they should. I think the approach they've taken with some of their acquisitions has been right on, a little slower than I would have liked, but the end result works," said Markland.

Markland also believes the more relationships a CU has with the core vendor, the more input the CU has in new products. "We can make their products better. We don't want cookie-cutter. We're always pushing to get products the way we need them, that fit our strategy," said Markland.

Kerry McKinnon, vice president of technology at $1.5 billion Mountain America CU in Salt Lake City, which is on Symitar's Episys system, knows what can happen when a product is added from a third-party that doesn't have a relationship with the core processor.

"We always look to our core vendor first. A lot of time vendors will say they can write to anything or interface with anything, but they don't understand all the fields, all the functionality within the core. So if they quote us a 60-day implementation, and they have no relationship with Symitar, it turns into double that time," said McKinnon.

Mountain America has also benefited from acquisitions Jack Henry has made. For example, it uses the Yellow Hammer Anti-Money Laundering product. Jack Henry acquired Yellow Hammer a few years ago to strengthen its fraud offerings. The credit union also utilizes a disaster recovery product that Jack Henry inherited when it acquired Centurion.

McKinnon said the add-on products don't necessarily have to be homegrown from Symitar; the key is that Symitar have a relationship with the third-party. That way the CU knows Symitar has vetted the third-party and integration will be tighter. She cited Digital Insight as an example. Symitar was an early partner of DI, and McKinnon said the CU benefits because DI is plugged in on system updates to Episys, and thus prepared to handle any changes.

For smaller credit unions like the $78 million Franklin County Teachers Credit Union in Chambersburg, Pa., relying on the core for more products saves time, money and headaches.

"We're a small staff of 10 people here, so we like to rely on one party for all our technology needs. We find it is much more convenient to have one source," said Haney.

His CU uses Flex for core processing. It will soon add Flex's credit card program and is already using Flex's loan origination, home banking, remote vulnerability and other products. Money also comes into play for smaller CUs.

"Price is a factor yes, and so is ease of use. I wear the IT hat and the manager's hat. If it weren't for PCs I wouldn't have any problems with IT at all," Haney quipped.

Kurt Snyder, vice president of IT for $1.3 billion Affinity FCU, Bedminster, N.J., says getting more from the core makes it easier to manage the sometimes overwhelming number of moving parts within IT. The CU is on XP System's XP2.

"The whole IT infrastructure and software area is complicated enough. We run a ton of different applications. Any time I can combine applications and get them to work together, I want to do that," said Snyder.

He also believes integration is just tighter when it's a product built out by the core processor. Affinity is one of the CU's working with XP on building commercial functionality into the core. Snyder said he would rather wait to get a homegrown commercial element into the core than partner with another third-party's existing system where integration issues will inevitably pop up.

"The more you can work through one vendor, the less finger pointing you get. When something goes wrong, the vendors start blaming each other. If I can consolidate, it takes a level of complexity away," said Snyder. Let the Processor Do the Work

Louis Perez, CEO of the $117 million Texas One CU in Houston likes to get all he can from core processor GalaxyPlus because it cuts down on due diligence and research.

"They do all the research for us. We trust them enough that if they've got something to offer, I know they've done all their due diligence," said Perez.

He said the CU of course still researches any product it rolls out, but the time is reduced when working with GalaxyPlus. He believes core processors have to be more multi-product in today's environment. "If you are going to compete, you're going to have to do more than just core processing. We use their call center software, audio response, home banking, ALM, ACH, collections and loans. We want them to do it all," said Perez.

Kevin Dougherty, senior vice president of information systems for the $1 billion Central Florida Educators' Federal Credit Union, believes some core tech offerings, like Internet banking, are natural fits for core processors to have in-house because of synergies with related products.

"Home banking is a prime example. The integration with my optical system, with the loan system. I mean things like opening subshare accounts is so much cleaner because it's all there," said Dougherty.

Lending is another synergistic area, said Dougherty. "With our USERS loan product we can use all the back-end stuff we're already using, the decisioning, the integrated credit reports. Everything is very seamless when members apply through the Web. We looked at other parties, but it just didn't make sense. A third-party can become an island. When they make changes, you have to make interface changes."

He also likes the relationship advantages of being a heavy user. "Our CEO met with USERS a few years ago about courtesy pay. He told them they had to have this system in their bag of tricks. Within nine months, they had it developed, so the turnaround time was very fast," said Dougherty. Purdue Employees FCU Senior Vice President Gail Koehler said Summit Information Systems has made it easier for the CU to look to it for more products because of its customer service and interaction on developing new products.

"We believe in getting as much as we can from our core processor because it simplifies our life. But if we don't believe what they have is best for us, we'll integrate other third-parties," said Koehler.

Even in those cases, she said, Summit is involved and has eased much of the angst of interfaces with Pathways, Summit's XML-based middleware solution.

PEFCU has used Pathways to bring on a number of products, such as a CRM product from Fiserv, a commercial loan analysis system from Baker Hill, and others.

The CU has been a client since 1994, and Koehler has learned that it won't always be smooth sailing. "Sometimes there are rocky roads, but they've been willing to bend. That has really helped cement our relationship."

Dale Dalbey, CEO of the $170 million Mutual Savings Credit Union in Birmingham, Ala., wants the "adviser advantage" that a close relationship with its core processor, EPL, Inc., can provide.

"We try to develop a long-term trusted adviser relationship with certain vendors. It makes it easier to our shop if we know they're committed to that relationship. It takes a large part of due diligence off the table," said Dalbey.

Dalbey's CU is not only a client of EPL, but an owner. He said he would never make a decision strictly on ownership, but it helps to have a seat at the table. "I think having a stake or ownership interest in any organization that has such strong involvement with the credit union makes sense," he said.

His CU buys hardware and software from EPL, knowing they've already cut a good deal with the suppliers. EPL's preferred vendors also have a leg up on other third-parties said Dalbey.

Flexibility is still key, said Dalbey. All processors must give their clients options, so if they do want to bring in a third-party product it's not a burden. "As credit unions look at different technology options, they want to move incrementally, not to have to make changes in every facet," he said.

- [email protected]