By Anthony Montgomery
When it’s time to go technology shopping, there’s no shortage of suppliers from which your credit union can choose. Some are big and some are small. Some started out in the credit union space and others snuck in through the banking back door. But CUSOs are of course unique in the fact that they were all started by credit unions, for credit unions.
The question is: Should you care? I think you should – and not just for the feel-good, kumbaya, support-the-movement reasons. CUSOs make good business sense.
For example, let’s consider profit. Every company out there is in business to make somebody rich. A private company is there to make its owners rich. A public company is there to make its shareholders rich. But a CUSO will never make anyone rich. It’s not supposed to.
What do you think that means to price? In my experience, CUSOs offer better pricing than their owner-enriching counterparts. For example, consider our CUProdigy core. We charge $1 per member per month. That’s it. Would you like to know how much our core would cost at your credit union? Multiply the number of members by 1. I don’t think you’ll find anything close to that at a for-profit core provider.
Other Ways Money is Taken from You
What are some other ways for-profit core vendors extract extra money from you? Some will sell you an in-house system today so they can collect all those up-front license fees. Then, in a few years, they’ll nudge you over to their service bureau so they can jack up your monthly bill. It’s the classic in-house/outsourced double-dip.
At CUProdigy, we know software-as-a-service via our private cloud is the best way to deliver a core system, so that’s all we offer.
You probably think of McDonald’s as a hamburger chain. Yet, it’s not all that surprising that they also sell about nine million pounds of French fries per day. As the burger business proves, there’s a lot of money to be made in add-ons.
The same is true for the core processing business. The larger the company, the more likely they are to have an arsenal of other products that they’re ready to push on you. There’s not necessarily anything wrong with one-stop shopping, as long as you make sure you’re not getting stuck with the equivalent of cold French fries. At CUProdigy, we don’t offer an array of add-on products because we include all of our software functionality within the $1 while embracing an open ecosystem philosophy for best of breed.
Finally, best of breed is why it’s important to consider third-party connectivity and open APIs. We know you’re going to want to integrate someone else’s products into our core. We get it. And, because we’re a CUSO, we want to make that easy and affordable for you. We’ll help you and we’ll guide you, but do you know what we won’t do? We won’t charge to integrate a third-party product because – say it with me – we’re a CUSO.
Is there a CUSO out there for every type of technology product you need? Probably not. But when there is a CUSO option, make sure you consider all the added benefits it can bring. That’s just good business sense.
Anthony Montgomery is CEO of CUProdigy.