By Kelly Flynn, National Director, ADVANTAGE
Believe it or not, many community financial institutions use core software purchased 20 to 30 years ago. To keep up with evolving technology and business growth, many have turned to adding ancillary products like chat, loan software, and online account opening tools. However, this often leads to a complex IT environment, making it challenging to manage, launch new products, and stay compliant with regulations.
Whether your current core is being sunset or it simply cannot support your growth goals, making a change is often the best move for gaining efficiencies and improving service delivery.
According to industry reports, financial institutions will NOT change core processors for several reasons. These included limited staff resources, fear that account holders will be inconvenienced during the switch, and cost.
While our clients have experienced these concerns, the underlying reason is not having enough time to evaluate all of the options and make a thorough comparison.
A new core processor is a significant undertaking. However, postponing the upgrade only exacerbates the problem if your system is outdated and not well-integrated with the other tech at your organization.
It’s time to overcome the hesitation, create a plan, and address the issue head-on so you can begin enjoying the advantages of a modern core processor and remain competitive.
A core processor conversion is a complex and lengthy process, ideally beginning two years before your contract expires. Since time is a finite resource, bringing in an experienced expert to lead the core search and conversion process can be highly beneficial. This expert can help navigate the complexities of keeping the project on track, ensuring a successful transition on time and within budget.
You will likely not take on any other large initiatives during the conversion. You may also find a need for more support as the project progresses. Consider hiring temporary staff to avoid overburdening your existing staff and to ensure a smooth transition for your account holders. Temporary staff can provide valuable assistance and may become potential long-term team members.
Leveraging outside expertise from ADVANTAGE streamlines the process to secure the best value for you. Our knowledge of the vendors and years of industry experience give us the upper hand when evaluating contracts and negotiating the best terms. We know what benefits and features to request and what other community financial institutions pay for similar services. Plus, we can help address your needs for future growth.
In a lengthy process like core conversions, you get even more from our team’s proven process:
Having support along the way can prevent your staff from getting weighed down by the administrative details of the search process. Plus, when it comes time to negotiate, you get the best deal and most favorable terms.
Our team recently helped a client complete a core processor conversion. The client had already narrowed their options to two vendors in this case. We evaluated each vendor’s proposal and negotiated the final offers for them to choose from. Here is their story.
Our client had been on the core for over 20 years. It was the first – and only – core processing system they had ever used. They had no idea how outdated the system was until we showed them what else was available. Plus, the vendor had not released any enhancements in quite some time, and they weren’t fixing anything, either – just patching or offering a workaround. It seemed to them that the vendor was phasing the system out.
Over the past ten years, the client successfully increased loan volume, but their evolving needs have made the current system feel less aligned with their goals. Despite this, their vendor’s account rep continued to push the same core, missing an opportunity to explore options that might have better served their growth and strengthened the client relationship.
By seeking expert advice on evaluating options, our client switched without significantly increasing their costs. The new system aligns better with their growth strategy and technology advancement plans.
The core conversion process can take some time, but the efficiencies, value, and growth potential you’ll see afterward will make the effort worthwhile.
If you’re not satisfied with your current core processor, check your contract today to see when it’s set to expire. Mark your calendar for when it’s 24 months from the expiration date – and make a plan to tackle this project head-on.
Connect with ADVANTAGE to learn more.