New, modular capabilities offer significant opportunities to improve efficiency, eliminate paper and replace manual processes, Ryon Packer, SVP, products, credit union solutions for the Brookfield, Wis.-based Fiserv, explained.

“Fundamentally, cores automate processes that allow credit unions to serve thousands of members per employee and to manage complex financial relationships,” Packer said.

Trailblazing development is key to credit unions' future. “We are losing more credit unions every year,” Xerex Bueno, chief technology officer at the Layton, Utah-based CUSO CUProdigy, said. “Part of it is we have yet to find a way to be really innovative in how we interact with our membership.”

Michelle Thorne, president/CEO for the $192 million, West Jordan, Utah-based American United Federal Credit Union, explained integration with the core offers a big advantage. “There's a lot more opportunity to do things more cost effectively,” she said.

To succeed, it is important that all channels integrate closely with the core. “There is a huge disconnect if you do not tie them together,” Christopher George, president/CEO of the $137 million, Canonsburg, Penn.-based CHROME Federal Credit Union, said.

An important issue for the Pennsylvania credit union is the user experience. “From a customer's standpoint, it is ridiculous to not have access to all your alerts or transactions in one place,” George said. “Again, our current solution prohibits the end user to see everything. One third-party app may let us, but another is restricted by the core integration. Today we are on an old legacy core and it is a terrible user experience. We have decided to move to a new core [the Miami-based NYMBUS' SmartCore], which emphasizes user experience.”

Bueno pointed out that what makes integration important is no single core vendor is the best at everything. “No one is going to be the best at home banking, mobile and all these other platforms,” he said.

The CTO of CUProdigy, which offers robust cloud-based solutions including its own core processing platform, added there are many startups with great ideas and technology. Use of that technology typically requires integration back to the core because that is where all the data lives.

“The core is everything we do technologically. A lot of what we do and how we take things is built off the flexibility that CUProdigy gives us,” Matthew Tingey, vice president of accounting and special operations for American United, said. “It's pretty cool that we are able to attack any problem, knowing we could probably integrate our core with anything. It gives us a lot more freedom and direction.”

American United cited several examples including its card program, which allows the credit union to issue cards in the branch, and a document retention program. The credit union also provides CUPay, an integrated member-to-member transfer capability, built on a system from the Aurora, Colo.-based mobile transaction platform provider DaLand Solutions. “We were able to create the majority of this with DaLand without having to rely on CUProdigy to build out a customer interface or customer adapter,” Tingey said.

American United also worked with the Salt Lake City, Utah-based Millennial Vision to develop new ways of dealing with receipts and signatures in-branch. These include full-color signature pads at the teller lines that display marketing messages when they're not in transaction mode.

“To do this we had to step outside of CUProdigy,” Tingey said. “We wanted a little more flexibility, a little more pop for our member experience.”

Integration also eliminates redundancy of the same data existing in three or four places, thus saving American United tellers 20 to 30 minutes a day.

The key to much of this integration is an easy allowance for APIs. “Our philosophy is to be very open to complementary products,” Bilke said.

He added Symitar tightly integrates with more than 100 solutions and has more than 150 third-party vendor applications integrated to its Episys platform. Symitar integrates third-party sources to the core via SymXchange or SymConnect.

“If the integrations between the core and additional capabilities are not sufficient, the credit union actually has to do more work and may have a greater chance of introducing errors during processes, ultimately losing productivity,” Packer emphasized.

The Fiserv vice president suggested that for the most common and critical processes, credit unions should consider the value of using modular solutions from the core vendors themselves versus those from other third parties. “When a core vendor extends the functionality of their suite with modular capabilities, they have a greater ability to integrate the work flow processes between the systems and develop a complete solution,” he said.

Packer explained Fiserv's focus is on the integration advantage – the use of its broad and deep portfolio, which allows credit unions to select the solutions that best align to their operating model. Credit unions can select the optimal capabilities for key functional areas, differentiating as they wish and saving money in other areas.

Bueno suggested credit unions seek a core provider with no limits when it comes to third-party integrations. “You are looking for a core provider that has an easy API to write to that will encourage and incentivize third-party vendors to integrate with the core,” he said. This helps credit unions accelerate in onboarding new technologies that drive membership and efficiencies, he added.

A huge challenge for core and third-party providers is ensuring tight integration. “There are core providers that are really not interested in that. If they are, they typically will charge a fee that is quite unreasonable at times to do that integration.” Bueno said.

Some core providers are so difficult to integrate with, sometimes because of old technology, it actually dissuades third parties from engaging with them.

Bueno noted, “Our core, completely rewritten in 2009, is a 100% open platform. We integrate with anyone and don't charge for integrations.”

Credit unions need to push their cores to build true application programming interfaces, George advised. “Cores need to open up and stop charging for the integrations. Today's cores are too greedy and have poor core engineering to allow flow of the data and the ability to mine it,” he said.

Thorne added, “There is nothing that is more irksome than to have a contract and then have all the add-ons on top of that. From the [CUProdigy] perspective, they have done a tremendous amount to make it open, accessible and affordable as much as possible.”

Robust interfaces and software development kits allow for solution development. “Many companies like Fiserv are creating a company-wide solution and leveraging industry standards to make it easier for credit unions to integrate across the portfolio,” Packer said.

Then there are real-time data benefits. “Integration with real-time transactions supplements the traditional batch loads and offers members and credit union staff access to the most current transactions,” Akin stated. “The information today is no longer a day or two old. It is now. It is current. It is what members and credit union staff require at the moment.”

Akin pointed out many third-party providers are limited to the interfaces provided by core and card processors, noting, “Data is often outdated by a day or more.” PSCU provides two key applications that credit unions and third parties can leverage with minimal development and via a single sign-on: The back-office, teller-facing QuickAssist and the customer-facing Access Point.

Credit unions should demand that core vendors not establish artificial barriers that limit their options, such as by imposing inflated integration costs or limiting access to core capabilities, Bilke said.

He also observed that community banks do not seem that interested in connecting disparate systems like mortgage products, card systems and traditional consumer products. “Credit unions are very aware of that and are doing a great job. Having the core be the aggregator of that information will ensure the longevity of the importance of the core system for a long time to come,” he said.

The bottom line: No one core can do it all.

“Innovation is what we have to start leaning on, whether it happens inside the credit union or we reach out to third parties,” Bueno said. “I think it is really key where the core just becomes that foundational building block, or information container, or, in terms of big data language, your data lake.”