Chartway FCU Rediscovers Its Core Capabilities

The $2.2 billion, Virginia Beach, Va.-based Chartway Federal Credit Union rediscovered the capabilities of its core system and in the process gained efficiencies in upgrades and maintenance, failover tests and staffing.

Chartway selected Symitar EASE, the outsourced delivery model of the Episys core processing platform from the Monett, Mo.-based Jack Henry & Associates, some seven years ago but it was not utilizing everything the system offered. “We did a vanilla install and just kind of let it sit there,” the credit union’s chief information officer, Rob Keatts, said.

When Keatts arrived shortly after from another large credit union that was running its core in-house (unlike Chartway, which had embraced an outsourced model), he had questions and concerns, mostly about how it would be without having “control.”

Keatts found the functionality of Chartway’s Episys system to be no different than it would be while running it in-house. He can still run custom development as desired. And, the technology is not something he has to budget for or be concerned with, because Symitar handles the lifecycle management that previously bogged the credit union down. Outsourcing alleviates the need to manage on premise systems or hardware updates.

According to Kathleen Garvey, outsourcing solution specialist for Symitar, 54% of JHA core clients (banks and credit unions) have chosen an outsourced delivery model and more than 70 of those financial institutions (banks and credit unions) have assets of more than $1 billion.

“When clients decide to outsource with us, we deliver our core in an environment that allows the credit union to customize and extend Episys to meet its own unique requirements, just as our in-house clients are able to do. We will complete OS and firmware upgrades, we will complete purges and we will complete release loads, to name a few. Our team of IT professionals becomes an extension of the client’s IT team and allows the credit union to refocus valuable, or limited, resources on revenue-generating projects.”

Garvey explained outsourcing to the company goes beyond just the core. “Credit unions can outsource their entire network, their call center and even receive support via a virtual information security officer.” She added the decision has become more about dedicating resources to focus on various emerging critical trends, including business analytics, faster payments, deposit growth and reducing fraud.

To learn the full capability of its system, Chartway had Symitar come in for a rediscover session in which the financial technology company gave a presentation as if it were pitching a brand-new system, and detailed EASE’s features and functionalities. “We went through that entire process with Symitar and identified a bunch of stuff the system did that we were not taking advantage of,” Keatts explained. He added the credit union gained a ton of efficiency just by using the product in a better way.

Since its core renaissance began, the credit union laid out a game plan about how to move forward, started moving to the next level of technology and made changes to its environment. Chartway’s rediscovery and new strategy implementation took place within the last 18 months or so. Among its areas of improvements were upgrades and maintenance, failover capabilities and staffing.

In Keatts’ first few weeks on the job, Chartway had to run a new release of its core, a process that, in his experience, typically required six weeks or more of work from the team. This time, he did not even know it had occurred until he was told by a staff member. The upgrades and updates proceeded on schedules set by Symitar. “We haven’t run into some of the challenges I’ve seen with other outsourcing agreements, because they really do know our environment, they understand it and they’re as responsive as they would be if [they were] in-house.”

Failover tests – a disaster recovery (DR) process in which system components such as the processor, server, network or database switch to a secondary system when the primary piece becomes inaccessible – became an almost invisible process. Keatts’ previous credit union would usually perform failovers once annually. Plus, it took about two months of preparation and about six to eight hours’ worth of downtime to get everything failed over and up and running. With Chartway’s core in the outsourced EASE environment, this process takes place semiannually and usually within two hours overnight. There is practically no involvement from his team other than some basic testing afterwards to make sure everything is back up and running properly.

Keatts claimed that DR is easier, even from an audit standpoint, which he noted is also completely different because NCUA auditors already know the EASE environment and its DR capabilities.

Not managing the core on premise allows Keatts to focus his team on what he wants and needs them to do, rather than on their core competencies. He previously needed two people just to handle the servers; now, the credit union hires to fill specific Chartway needs such as maintaining a small development staff.

Chartway also did very little custom development within Symitar, one of the core system’s strengths, before the intervention. Since turning the corner in comprehending more system capabilities, the credit union has had almost a dozen custom development projects progressing to make the end users’ and employees’ experience easier and faster within the technology.

Keatts described the changes as small configuration-type things – changes to the way the organization did things that did not make sense. “It wasn’t like a new product. It was a new way of using the existing products such as launching two new checking products [one is a low-fee, debit-only product] built on the back-end in Symitar. We didn’t think we could even do something like that and we learned we could.”

Chartway also selected Symitar’s Implementations Project Management to help facilitate a brand unification project, which was successfully completed in early 2017, following Chartway’s merger with three Utah credit union – SouthWest Community, HeritageWest and Utah Central. Some of the many challenges included making ACH and draft edit modifications, merging the home banking systems into NetTeller and merging the bill pay systems into iPay Solutions. The project management service helped the credit union coordinate JHA resources and stay on top of deliverable dates.

Earlier this year, Symitar identified outsourcing as an emerging trend, describing it as, “The call to outsource core functions by being more reliant on resource allocation to emerging areas: Data management, business analytics, faster payments, business growth via digital channels, commercial lending and deposit growth, and reducing fraud.”

While historically smaller institutions embraced outsourcing, Garvey pointed out, “We continue to see more credit unions – of all sizes – embrace this model as our industry changes. Compliance is harder to maintain, infrastructure costs are significant, and IT talent is hard to come by. Credit unions are becoming more comfortable with hosted services as they realize their expansive value to alleviate multiple challenges.”

Chartway does not question the implementation of an outsourced core system versus an in-house system. “The [EASE] system works exactly the same and we don’t even think about it,” Keatts said. He pointed to how it really comes into play with hardware, software or version upgrades, and disaster recovery testing. “All that stuff that my team used to spend months’ worth of project planning to prepare for is really off my shoulders all together.”

Chartway now focuses specifically on making changes to the systems that touch staff and members. “It really allowed us to do more positive growth within the system with fewer employees,” he said.