<p>INDIANAPOLIS – Trusting its own for the brainpower while going to the leader in medical databases for computing punch has turned out to be a prescription for success for FORUM Credit Union. The $585 million CU created its own consumer loan application and home banking solutions, each using InterSystem Corp's CACHE' post-relational database to create scalable Web and client/server applications that have produced a very quick return, according to FORUM leaders. And now, in addition to serving its own members, the FORUM developers are creating new revenue for the home team by currently serving four other credit unions with their TAPS 24/7 home banking product and seven CU's with the TAPS Lending solution, under the umbrella of the credit union's FORUM Solutions subsidiary. TAPS stands for Total Application Processing System. The Indianapolis CU's first such product was TAPS Lending, an online solution that launched in 1999 after 90 days of development and produced a full return on investment in nine months. Building on that success, the CU formed FORUM Solutions, which then created TAPS 24/7 home banking in 2001, realizing full ROI on that project in six months. In 2001, the credit union made more than $1.6 million on those ventures, including significant income from a new brass ring of financial services marketing: member-relationship cross-selling of credit insurance products. Other measures of success are FORUM's growth, which has been 20% a year for the past three years, and the overall high rate of use of its online products by a burgeoning membership base that now stands at 75,000. More is on the way, too. For instance, an electronic board meeting product developed and deployed internally is expected be offered to other credit unions later this year. HOW IT HAPPENED Faced with growing competitive challenges and dissatisfied with what was available in the nascent vendor market for Web-based services, FORUM's leaders figured they would put their confidence in the talents of those they knew best, their own staff. "We decided we had the in-house capability to design these solutions because of the expertise we had on staff. We are fortunate to have a gifted development team led by Cam Minges, vice president and chief software architect," said Douglas True, FORUM's senior vice president and chief information officer. "This development team is complemented by experts in the area of lending and home banking. The design of both solutions was driven by employees who are intimate with the daily operational processes involved with lending and home banking, and most importantly, intimate with what credit union members expect in both areas. "The success of the two solutions is directly attributable to these influences." Of course, the credit union considered third-party offerings before decided striking out on its own, but at the time couldn't find one that met the personalization features and function breadth it wanted. So after deciding to do it internally, the next step became choosing what technology to use to build those solutions. After considering the options, the CACHE' solution from InterSystems Corp. of Cambridge, Mass., was chosen. Already the leader in medical databases, the company had a large base of clients across a broad range of businesses and offered the functionality the CU decided it needed, particularly in the area of rapid application development. "CACHE's database technology is optimized for use in transaction-intensive applications in any industry," said Paul Grabscheid, InterSystem's vice president of strategic planning. "Because of its efficient, multi-dimensional database, and a distributed protocol that dramatically reduces network traffic, CACHE'-based applications can be scaled up to serve many thousands of users without sacrificing performance," Grabscheid said. "As a result, FORUM applications are able to handle a very large number of users while also delivering the fast response needed to compete in the financial services arena," he said. THRIVING WHILE SURVIVING Competition, indeed, was a driving force in FORUM's thinking. The credit union's traditional advantage in interest rates had begun to erode in the face of aggressive Internet banks and loss-leading loan rates from the big banks when FORUM decided to make its move with CACHE' and TAPS, True said. "TAPS Lending has allowed FORUM Credit Union to compete in the consumer loan marketplace on the basis of quality and speedy service rather than on the traditional aspect of marketing by interest rate," he said. "FORUM Credit Union has successfully marketed consumer loans based on a '10 Minutes or $10 Campaign.' We guarantee members that they will receive an answer on their loan, even those that need reviewed by an actual underwriter, in 10 minutes or less. If they don't, they'll get $10 automatically deposited to their account," the FORUM senior vice president said. In two years, that promise has the cost the credit union all of $20. Of course, it wasn't as easy as it sounds. "The major obstacles in the development process centered around the tight deadlines we had for development," Minges said. "Time was limited, so it was important for us to define the scope of the initial release and stick to it. We encountered problems with the score widening due to a number of enhancement ideas during the development and testing phases of the projects," the chief software architect said. "We had to make hard decisions about what to include in the initial release and what would be put off for a future release. We overcame these obstacles with improved communication between the development team and the teams that provided creative input from their area of expertise," Minges said. The effort was worth it, if the numbers mean anything: Net income in 2001 from TAPS lending activity was $1.63 million. That comes from $22.5 million in cross-sold consumer loans accounting for $1.41 million, a 36% penetration in credit life insurance resulting in $126,000 in income and a 27% penetration in credit disability insurance netting another $84,500. Thirty-five percent of FORUM Credit Union's households use home banking. The national average for credit unions is 19%, according to Raddon Financial Services. Fifty-nine percent with checking accounts at FORUM are using home banking, putting FORUM in the 84th percentile among its peers. Thirty-two percent of FORUM's home-banking users are paying bills through the service, compared with a national average of 14%. "The costs of creating solutions in-house have certainly been justified in the long run," True said. OTHERS WITH CACHE' Other users of CACHE' technology in the credit union space are core processor USERS Inc., auto loan processor Credit Union Direct Corp. and 1st Advantage Federal Credit Union in Newport News, Va. "USERS developed its DataSafe/SQL open transaction processing system on CACHE' and now its job run-times are much faster, enabling credit unions to process more with less horsepower," Grabscheid said. "1st Advantage implemented the CACHE'-based DataSafe system as a means of achieving high-performance processing and gaining a presence on the Web. As a result, it was able to widen its member services with online banking and debit card services," he said. "CU Direct used CACHE' to develop its own applications, including a Web interface for credit unions that could go live as early as this summer," Grabscheid added. The company also is committed to keeping up with the evolution of Internet commerce. "One example: the addition of XML and Web Services capabilities that will help credit unions make their Web-based products increasingly flexible and interoperable," Grabscheid said. "It's true that InterSystems is the leading database in health care," Grabscheid said. "But CACHE' is used in a variety of industry sectors running the gamut from financial services through retail, government, telecommunications, hospitality, manufacturing, distribution and information services. "In all cases, our approach is to work closely with in-house innovators like those at FORUM in order to help them achieve their business objectives," the InterSystems vice president said. "Currently, credit unions are facing major competitive challenges as larger financial services approach their members with new products and services. As a result, FORUM and other forward-thinking credit unions are focused on rolling out new product offerings, and InterSystems is working with them to help them succeed in these new initiatives within the tight delivery timeframes needed for competitive success," Grabscheid said. Creating in-house technology solutions is not FORUM's only ambitious venture. The credit union also is making moves toward capturing business banking members, in a market dominated by banking behemoth Bank One. On the administrative front, the credit union has hired experienced business bankers to lead that effort, and was the first in the state to become registered to do SBA lending. And now it must look to the technology. A bold move into business relationships would require integration of multiple systems such as Baker Hill portfolio management and exception tracking, EFS Bank for merchant services, First Data Resources for business credit cards and Laser Pro for loan documentation, all backed up by the credit union's core USERS system for loan accounting and deposits. That kind of integration, and automating such things as loan payments and checking and savings functions that now are manual, along with the small business loan underwriting process, is on the credit union's technology wish list, according to an interview with FORUM business-banking leaders that was posted recently at CUES Tech Port. So, how does all this innovation and accomplishment make management feel? "A euphoric feeling of pride and satisfaction is the best way to describe what the team has accomplished," True told Credit Union Times. "The most satisfaction is derived from hearing about how the members and employees of the credit union use the technology to improve relationships, not only between employees and members of FORUM Credit Union, but also at the other credit unions we serve," the credit union's CIO said. "Empowering members and employees to strengthen these relationships is the goal. We realize that technology is meant to complement the power of personal interactions." -</p> <p>[email protected]</p>