Processor that is. Although I feel like I’m being held hostage by my “core” since I had major abdominal surgery two weeks ago – ouch. But enough about me already.
Tansley Stearns posted a great comment on my blog last week and she got me thinking about the biggest excuse credit unions use for not innovating. Our core processor does not have the capability.
I’ve heard it for 32 years. Before we had computers all of our member data was in a ledger. Everything we did we did manually. We typed up documents – in triplicate with carbon paper on an IBM Selectric. We filed things. We had “ticklers” that was no more than a recipe box turned relationship builder. We remembered people’s names and their kids’ names. We had loyal members that helped us grow with positive word-of-mouth.
Today we get a great idea about how to reward our members (for example) but someone will remind us that our core processor has the intelligence of a door knob and we all shake our heads and give up.
Besides your compensation, budget and facilities, what is the third biggest annual expense at your credit union? No doubt your data processing bill. Hundreds of thousands of dollars spent on what? Keeping you from doing great things.
How many of you have had to purchase OTHER systems – for major transactions (like loan processing, home banking, bill pay) because your “core” can’t do it – or rather won’t do it?
And this is perhaps the most absurd of them all – because we have so many ancillary programs – we often require our employees to re-enter member information because – you guessed it – our core won’t talk to strangers. At least when we typed documents in triplicate we only had to do it once!
The solution? I look to the folks at the shared branching networks. They have somehow made it possible for credit unions all over the world to talk to each other. I can walk into a credit union in Santa Fe, New Mexico and in real time withdraw money (or deposit) to my account in Portland, Oregon. Pretty amazing.
I have no idea how they do it (I’m in marketing) but to quote Steve Martin from Born Standing Up:
“Despite a lack of natural ability, I did have the one element necessary to all early creativity: naivete’, that fabulous quality that keeps you from knowing just how unsuited you are for what you are about to do.”
So here goes. I picture a CUSO that is dedicated to ONE thing. Developing a common language among credit unions. We have a universal core that sits in a cloud. We innovate together. Dare I say we cooperate? If I am a member of a credit union – I can transact with all credit unions. I can P-2-P and A-2-A with any member. We drive our own payment systems. We create our own e-wallet and with $1 trillion in assets we become a force to be reckoned with. We share expense and revenue based on our usage.
We need to fight the REAL enemy – our core processor. By trying to do everything ourselves – alone – we are losing small credit unions, we consider “other credit unions” to be our competitors. Bank of America, Wells Fargo, Citi, etc. are still alive and well because of the “convenience” they offer. As of March of this year there were 7,163 credit unions. Only 1465 of those are over $100 million in assets. But if we could safely say we have over 10,000 credit union locations (branches) we are one big ass convenient bank. Bank of America has 6, 233 branches. Boo yah!
Who’s with me? What am I missing? How do we get this party started?