By Denny Gillott
Did you know one of every 10 credit union now trusts a CUSO for their core data processing needs?
In the past few years this fact has not necessarily been front page news, but a growing ground swell of support is heading toward the technology CUSO’s way. So the question is, why is this the case?
The basic ingredient stems from a CUSO’s ownership – credit unions – hence, the grass roots philosophy surrounding a credit union is instilled within the fabric of a CUSO. Provide great products and services to the membership at a low cost, the same way you plough your profits back into the membership.
Many years ago the country was flooded with regional core providers. These were credit union core providers that understood their clients and delivered outstanding support. They were nimble in providing the very strong solutions that they developed. When calling a provider, they knew your voice without asking. That time ended with the merger and acquisition of these regional core suppliers by three or four large vendors. CUSOs have emerged to replace the void left by the regional core vendors of yesteryear. Once again, the credit union staffer can call their CUSO and have a friendly person that totally understands the credit union, along with knowing your voice.
CUSOs are “technology nimble” and driven by the needs of the credit union movement. Somehow over the years, “industry” replaced “movement” – but not in the mindset of a CUSO! Product design and desires are at the top of the food chain instead of bottom-line net revenue.
With a CUSO, you have direct input. You have to remember that the owners are your fellow credit union peers. Compare that to any big box core’s design on obtaining “user feedback” vs. a CUSO having owner input. Enough said.
But, is a CUSO a safe and sound business to trust your member processing needs? There is not any substitute for proper due diligence. But, the trend and popularity cannot be ignored. The strong CUSO’s have professional staff that typically came from a credit union background. Typically you will find a staff of 50 or more at a strong CUSO doing business with upwards of 75 creditunions or more.
A Mechanism to Breakaway
A CUSO provides the platform for credit unions to collaboratively outsource functions for economy of scale. A technology CUSO is the answer for many credit unions today because they can even become the IT department of a credit union. Not only core processing, but a CUSO can perform managed IT services, host your email, host and maintain third party hardware servers, provide network and security services, and much more. Some credit unions are processed “in-house” and with the complexity of such systems, it is easy to understand why a CEO and staff may “beholden to the IT department.”
A CUSO provides the potential mechanism to breakaway from this risk of a single point of technology failure. If a core due diligence project is in your future, it just makes sense to add a technology CUSO to the list for consideration.
Denny Gillott is Senior VP of Sales with United Solutions. For info: www.unitedsolutions.coop.