Opening Up to New Core Possibilities

Because no single technology can do everything, credit union core systems must be capable of integrating with third-party providers and application programming interfaces to deliver experiences that members demand.

Much of new fintech is only functional with the right data input. Therefore, credit unions should move on from legacy systems to unlock member information. “The first thing about being an open environment is you have got to have easy access to the data stored in the system,” Ted Bilke, president of the Monett, Mo.-based Jack Henry & Associate’s Symitar division, observed.

For this first installment of a two-part look at open cores, Bilke and other experts representing credit union providers present their perspective. Part two will offer credit unions’ viewpoints.

Favoring an open environment is Symitar, which allows for easy integration of third-party applications through its Episys core processing platform, utilized by approximately 700 credit union customers. Symitar EASE is the outsourced delivery model of Episys.

Symitar allows access to data using tools such as Power On, which permits the creation and extraction of files from the core; and Advanced Reporting for Credit Unions, which answers fundamental business questions by monitoring key performance indicators and factors.

“We’re starting to promote core as an enablement platform,” Bilke said. “We’re creating more enterprise solutions.” For example, though JHA offers the Banno Digital Banking Suite, Bilke pointed out it still provides some 100 different mobile solutions to its customers. “Trying to force everybody to a single product isn’t really the strategy.”

Other integration-friendly Symitar products/services include SymXchange for interactive data exchanges; jXchange for third-party integration; SymApp, a configurable online solution; and the Symitar Vendor Integration Program, which provides access to technical resources.

About a year ago Symitar expanded its longtime partnership with the Farmington Hills, Mich.-based CUSO Member Driven Technologies, which offers the Episys platform. MDT provides a private hybrid cloud alternative for credit union core processing and IT needs.

“We’re trying to reduce our credit unions’ footprint from a hardware, infrastructure and IT perspective,” Gary Lee, vice president of client relations and sales at MDT, said. “But if credit unions still like to touch, look at and develop some of their own products, workflows or applications we will allow them to do that.”

Lee explained MDT, which has about 100 hosted clients in its data center, provides flexibility. “We’re not going to handcuff our credit unions and say, ‘Here’s the system in the box, this is what you get and you have to go to the beat of our drum.’”

He noted, “They can truly call themselves a lights-out environment if they’re leveraging our automation tools.” But MDT also permits third-party solutions that fill different niches.

“If Symitar is already looking at certifying or vetting that third party that wants to talk to the Episys core platform, then that’s great by us,” Lee said. However, even a noncertified vendor that is seeking integration with a particular credit union can receive accommodation. “If it’s a smaller player in the space, then we’ll work with those vendors directly,” Lee added.

The Layton, Utah-based CUSO CUProdigy delivers a modern, cloud-based core processing solution it said is unmatched in its functionality, openness and pricing. CUProdigy maintained its open ecosystem philosophy welcomes third-party integrations.

“CUProdigy’s original core system started out like all the other legacy cores. It was built around a relatively closed database using relatively old tools,” Amber Harsin, EVP of market engagement for CUProdigy, said. “This was fine 20 years ago when the need for custom third-party integrations was still low.”

Harsin noted about 10 years ago the CUSO saw the writing on the wall. “Credit unions were demanding more and more third-party integrations, and the products they wanted to integrate were becoming increasingly sophisticated.” At the same time, resource costs to maintain the old system were rising while resource knowledge was dwindling. “Rather than patch together the old and the new, as others have, we did an entire rewrite using modern tools, a modern architecture and an open, SQL database.” The entire platform is extensible.

CUProdigy’s browser-based user interface offers flexibility during the integration of another vendor’s browser-based products. “The end result is that we have a lot of happy credit unions, as well as a lot of happy third-party vendors who enjoy working with us,” Harsin said, adding,

“We don’t care whether the vendor writes to our API or we write to theirs. We simply believe in doing whatever is best for the credit union rather than enforcing some arbitrary API integration policy.”

The San Diego, Calif.-based core provider Corelation focuses on providing a powerful and easy-to-use KeyStone core platform that enables credit unions to deliver premium service to their members, according to Chief Technology Officer Jeff Dent.

Dent explained Corelation focuses on delivering “more in the core” to substantially reduce the need for third-party solutions. “However, there are times when other solutions provide specialized functionality around a key business unit. Therefore, a tenet of Corelation’s philosophy is to enable clients to determine the vendor that best resolves their business needs and remove any technological or financial barriers to implementing their preferred solution.”

Dent added, “The system is built with flexibility and power to serve the diverse technology needs of credit unions today.” The KeyStone open XML API, called KeyBridge, provides real-time, bidirectional integration between the core and any third-party solution or in-house developed applications. KeyBridge is also available with a site license, which enables a credit union to integrate with any number of third parties.

By using KeyBridge, the credit union and its partners benefit from API enhancement, which brings new functionality into the core, Dent noted. “The result is an API that supports access to every field and transaction set available in the core. Essentially your third-party becomes a tightly integrated extension of the core.”

The $2.5 billion, Albuquerque, N.M.-based Sandia Laboratory Federal Credit Union recently converted unwieldly dual core processing systems into the single, open architecture of Corelation’s KeyStone platform. The Aurora, Colo.-based CUSO DaLand Solutions served as project manager and technical consultant.

CEO Jeff Levesque and COO Jon Ungerland set up DaLand to focus on credit union relevance through sound strategic design, actualization and protection, and modernization of credit unions’ operations and delivery channels.

“One of our main focuses to any strategy is the technical foundation built to support modern operations and digital delivery needed for relevance in today’s marketplace,” Levesque said. “This foundation must include a data repository without limitations and the ability to access and extend that data in real time to all channels.”

DaLand helps credit unions use or customize an open architecture, and build a sustainable, profitable, modern strategy to surround their open core solution.

DaLand begins its services by helping a credit union evaluate its core strategy. “By ‘core’ here we mean not only their core technology, but how effectively and efficiently the credit union management team is prepared with a complimentary strategy,” Levesque stated. He added centralization of data in a relevant core, followed by extension of that data to the consumer, is the only path to becoming competitive, financially viable and strategically sustainable.

Levesque noted DaLand learned from conversations with credit unions that were consistently constrained by core technology. “It’s a path toward financial and resource anemia, excessive vendor risk and intolerable strategic inflexibility. In short, it’s a death sentence for any business trying to compete in the digital, data-driven era, let alone a financial institution faced with meeting the demands of savvy, valuable, digital device-saturated users.”