HARRISBURG, Pa. – Pennsylvania State Employees CU President/CEO Greg Smith says it's time for PSECU to share the wealth with the rest of the CU industry – its wealth of IT expertise that is. The $1.6 billion PSECU, long recognized for being a technology pacesetter, has formed a new IT CUSO, eCU Technologies. The CUSO will be offering IT solutions primarily for CUs using the Symitar Systems' core processing system. Product offerings include home banking, kiosks, online lending, and report development. The CU's story is well-known. It has only one branch and serves 267,000 members, with its modus operandi being remote delivery through tech channels. It's not a stretch to say that the credit union has the equivalent in staffing and budget to some third-party tech firms serving CUs. It has an IT staff of about 45 with an IT budget between $5-7 million. Over the years PSECU has played host to a plethora of CUs that visit its headquarters to see how the credit union approaches technology. Smith said he's often been approached by other CUs to buy something that the CU has developed in-house – now's their chance. "In the last three months we've had Symitar clients visit us who had been on the system for six to ten years. They come here and say `show us how you do this. Can we buy that?' If a Symitar credit union has interest in extracting the most out of their systems, we think we can show them some things they might not know about," said Smith. The genesis of the CUSO (www.ecutech nologies.com) stems from PSECU learning that its current home banking system was no longer going to be supported. The vendor had been acquired by a larger company and their system was being phased out. Smith said PSECU was faced with a hefty price tag – to put it lightly – to move over to the parent company's home banking system or over to a new system. Smith said he was amazed at how expensive some of the home banking solutions in the marketplace are. In July of last year PSECU's IT staff built a stripped-down version of home banking to run on kiosks it built in-house for disbursement on college campuses in Pennsylvania. "We figured if we could build a stripped-down version of home banking for our kiosks in just a few weeks, what could we build if we had more time?" said Smith. So the CU's IT staff started work on a full-blown home banking system. It started in January of this year. The $1.8 billion Delta Employees CU became the test client for the new banking system, said Alan Brunner, director of client services for the new CUSO. "Our board told us they were going to let us do a pilot program for six months. We worked exclusively with Delta. We started testing around April. They were incredible to work with. We couldn't have picked a better first client. By mid June we implemented the system. Now it's up and running with up to 350-400 concurrent sessions," said Brunner. The number of concurrent user sessions is a big deal in the home banking realm, and often a major factor home banking vendors use in pricing clients. Brunner said initially they had Delta Employees CU running about 175-225 concurrent user sessions, before having to add a second transaction server to get it up to the 400 capacity. "We installed a load balancing program that determines which server to go on to, so your servers aren't being hit as hard," said Brunner. Delta Employees CU has about 40,000 regular home banking users. "We were looking to move from our old system to be able to customize with standard programming language that PSECU uses. We looked at their system and thought it added more flexibility," said Danny Smith, senior vice president IT for Delta Employees CU. The CU had been using Symitar's home banking system. Delta's Smith said the CU was confident dealing with people who work in a tech-savy credit union. "They know what members want, where problems can arise. They've been there. They delivered on everything we asked them for. I don't think you can ask for much more that," said Smith. The new CUSO consists of a staff of five, with two more people expected to be hired later this year. The five staffers have been cut from PSECU's books, and are now CUSO employees. The CUSO already has a handful of clients, including Delta Employees CU, Alaska USA FCU, and Philadelphia Telco CU. Brunner said there are interesting IT stories floating all over PSECU. One in particular is that of Tracy Epp, currently a senior programmer and an integral player in the Delta Employees' CU home banking project. What's unique about Epp is that she started with the credit union about a decade ago as a teller, and got on a tech-track that took her all the way up to senior programmer. "It's an amazing story," said Brunner. Epp is one of the five PSECU IT staffers that have moved over to the new CUSO. One of the most unique aspects about the six kiosks PSECU has installed on college campuses, is that it didn't just build the system interfaces for the kiosks- it built the actual kiosks. "There are cabinet manufacturers out there. You find one you like, purchase the cabinet and there's basically just a PC that goes inside. That along with a touch-screen monitor and that's really about it," said Rick Long, vice president of Information Technology Systems for PSECU. Through this home-built approach, PSECU was able to construct kiosks for about $15,000 a piece, much less than the $30,000-$40,000 price quotes it was getting from vendors. PSECU was so proud of its home-built kiosk, it packed one up and took it on the road to display in California at Symitar's users conference. "Symitar was more than willing to let us go out there and have a booth at their conference. Our objective was to survey credit unions and find out their interest. A ton of credit unions kept coming up and checking it out," said Long. Long said there was interest in the kiosk, but also a lot of interest in an online banking system. Those two key findings were the foundation for developing eCU Technologies, which will now be selling both kiosks and home banking. Long said having such a robust, ambitious IT program in-house at PSECU makes for some long, hard days, but the benefits outweigh the tough workload. "You don't get many chances to take a breath and kick back and relax. You're constantly running at 150 MPH, constantly evolving new tech initiatives. That's the way it is. But the benefits are being able to make changes on your own, changes that are totally up to the credit union, not the vendors," said Long. Long says it's not easy to complain about the pressure given that the CEO is a dogged tech-lover who dedicates a lot of his own time to understanding everything that the IT staff is up to. "A lot of what we do is driven by Greg. He's constantly communicating with members on tech issues. The fact that a CEO is providing tech support to members is a story in of itself. When your CEO does that you can't very well sit back and relax," said Long. Smith said the CUSO's products will be reasonably priced and he's not looking for it to be a big moneymaker, but the income will be nice to offset the CU's large tech budget, and to place back into R&D. While the home banking piece will be strictly for Symitar clients, the kiosks will likely be for all credit unions. The online lending piece will be available later this fall. Long said he's amazed that more CUs aren't authenticating members to make the online lending process more efficient. "If you have access to members' data, why would you ever pull up a blank application? We authenticate our members here so you can pre-fill applications," said Long. The CU has also integrated the system with the loan origination system, so the Web application is populated into the loan origination system. The only time a CU employee touches a piece of paper is when they are pulling the member's check off the printer. The CU gets about 45% of all its member loan applications through its Web site, with 60% resulting in automated approvals. Interestingly, of the remaining 55% of apps, only about 3-4% come from indirect lending, and 1% through the mail, the other 40% come through the call center. PSECU built the authentication piece in-house. Its IT staff has also built its bill-pay program (the CU does its own fulfillment for bill pay), e-statements, online check imaging, and others. "What we can do for other credit unions is share with them some of the technology that we've already built, at a much lower price than they're going to get at some of these other companies. That helps PSECU because we can take that money and put it back into our own technology development," said Smith. Technology is no good, says Smith, unless it results in a more efficient CU. "The thing we excel at around here is productivity, which comes from our reliance on technology." The numbers back that up. At PSECU, only about $2.50 of every $100 in gross income comes from member fee income. Callahan numbers for PSECU's peer group CUs show over $7 of every $100 comes from member fees. [email protected]