For core system vendors, it's one thing to boast about communicating with users and quite another to actually build a core processing system through customer collaboration, as the Layton, Utah-based CUProdigy does.

The foundation of CUProdigy's capabilities centers around its cloud infrastructure and cloud-only implementation method, which, according to CUProdigy CEO Anthony Montgomery, makes the system more nimble and agile. “This, in turn, makes it easier to implement new features,” he said.

Montgomery pointed out the browser-based software does not require credit unions to complete updates and/or deployments on their own. “We also handle all the server software in the cloud. If we had traditional legacy architecture, it would be much harder for us to develop and implement new features,” he said, adding CUProdigy could not release updates frequently if it were burdened with legacy architecture.

Montgomery said deployment is simplified through the release of smaller amounts of code. “The credit unions actually prefer CUProdigy's more frequent releases. One obvious reason is they do not have to wait a year to receive something that can benefit them today. This keeps their code nimble.” In addition, it is easier to understand and manage several smaller releases of code compared to one large, annual release.

As a CUSO, CUProdigy's owners get to determine direction and prioritize what goes into the development of future releases. Core processing system updates all begin with feedback from its credit union base.

“First, it's important to realize that feedback mechanisms must align with a core software provider's release mechanisms. For example, a high-frequency feedback cycle coupled with a low-frequency release cycle does not mesh well. Release cycle frequency further drives business philosophy decisions,” Montgomery said. “CUProdigy has deliberatively chosen to be a nimble, agile software development company. As such, our release capabilities are built around frequent releases and we release 11 times a year.”

Second, CUProdigy has developed feedback mechanisms that support these smaller, more frequent code releases; it uses three primary feedback mechanisms.

In one process, focus groups collaborate together on specific themes such as lending, operations or accounting. They scrutinize new ideas, help design new functionality and prioritize work. “CUProdigy does not lead these groups. That is an important distinction. CUProdigy only provides the forum and logistical support,” Montgomery said.

These self-governed groups are open to any credit union, and credit unions may participate in as many as they desire. Groups elect a chairperson from one credit union, set their meeting schedule, determine their meeting protocol and prioritization methods, and run their own meetings. These focus groups also process their own enhancement ideas. Most credit union participants are individual contributors, and no CEOs participate. CUProdigy simply incorporates the output of these focus groups as input into what Montgomery calls its “development sprints.”

Other primary feedback mechanisms are the ideation sessions that take place whenever CUProdigy credit unions get together, such as at its annual meeting. In these sessions, participants set up in informal groups of three to five people. The only rules are as follows: A time limit applies, teams must write their ideas on a post-it note (only one idea per post-it note is permitted), teams must discuss their idea with the group as a whole, and at the end, everyone “dot” votes for their top ideas. In dot voting, each participant decides how to ration five votes across all ideas using dot stickers or markers.

The last primary feedback mechanism is the use of software demonstrations during the development cycle. “In this forum, developers show the progress of their enhancements to CUProdigy credit unions, which provide feedback. The feedback can range from field labels to button locations to completely new ideas on how to improve the functionality,” Montgomery said.

The focus groups vet the enhancement requests themselves. There is also screening criteria for ideas. For example, CUProdigy's business philosophy is to create an open ecosystem for its core software to benefit all credit unions. “This means we leverage our open API and do not charge credit unions for third-party integrations,” Montgomery noted. He added if a credit union requests something counter to its business philosophy, either the focus group or the CUSO would decline the request. “This also means we won't likely develop our own mobile banking or online banking functionality because we choose to integrate with other vendors that specialize in that type of software.”

The other deciding factor is the level of effort required. “We provide effort levels to the focus groups so they can manage the value received per se. If one request will take three times as long as two other requests, that focus group may decide it would rather have the two smaller requests now instead of the one larger request.”

Montgomery noted typically the top items from the focus group meetings become incorporated into the next available development sprints. “These then flow as per the normal development and release cycles.”

Roy MacKinnon, president/CEO at the $200 million, Lancaster, Calif.-based Edwards Federal Credit Union, whose credit union just recently signed on with CUProdigy for a core implementation, noted, “It's a very collaborative core as compared to other for-profit cores.”

MacKinnon explained he has had two experiences with CUProdigy's cooperative approach to date. One was during the screening process during Edwards' new core search last spring and summer. Edwards, which had been on the same core for 16 years, was seeking new technology that would improve both the member and employee experience.

“We could all tell that not only were they credit union people, it was obvious the Prodigy team really enjoyed what they were doing and really believed in their core solution,” MacKinnon said.

The credit union's staff noticed during an initial meeting that CUProdigy was open to suggestions that would help Edwards, such as one that would make it easier for its frontline staff to understand the profitability of specific members. By round two, CUProdigy had already put the idea in development and made it available to any organizations that wanted to use it. “That was really eye opening because we didn't hear anything like that from the other cores that we interviewed,” MacKinnon maintained.

Edwards signed a contract with CUProdigy in August 2017 and is scheduled to convert in October 2018.

Edwards' second exposure to the CUSO came in September at CUProdigy's users group meeting. “The most fascinating thing about it was to watch the collaboration between credit unions,” MacKinnon said. “There was truly a feeling of, 'We're all in this together.'” Plus, he had the opportunity to talk to both one of the largest credit unions on the core and one of the smaller ones. “I witnessed first-hand the collaborative nature of the people getting together and the one-for-all and all-for-one kind of attitude.”

For MacKinnon, it proved the credit union made the right decision. In addition, because CUProdigy's core is browser- and cloud-based, the CUSO can customize solutions right off the bat for new clients based on what they need. MacKinnon pointed out, “That kind of circles back to the collaborative nature of their approach.”

Instant Insights /

Collaborative Effort Sprouts Core System Innovations

Related Stories

Recommended For You