Credit Union Shared Services (CUSS) white paper announcing a modernized core and sandbox of connected solutions to be released on Oct. 26 at the Underground.
Unshackle CUs from Predatory Legacy Tech
By Susan Mitchell
Most credit union industry executives know that running on a core system that’s 50 years old is a significant problem. Some executives have tried to improve the situation by migrating to the cloud, only to realize that their system is still running on an underbelly of obsolete technology. So that’s not a full solution.
And unfortunately, the problem is much bigger than legacy tech.
The problem is also predatory tech. Credit unions often find it cost-prohibitive to move away from technology that no longer serves them because of long-term vendor contracts that specify incredibly high fees.
Fortunately, Mitchell Stankovic and Associates has taken on the challenge of unshackling credit unions from the burden of predatory legacy technology so they can move forward the industry vision for excellence in member experience in a big way. The results of this effort will be announced on Oct. 26 at MSA’s UNDERGROUND event at Money 20/20 in Las Vegas. Register today!
Let’s dive further into what we know about predatory legacy tech and how credit unions overall, and especially smaller credit unions, can leverage the new Credit Union Shared Services solution for the good of their members and organizations. (Time to CUSS!)
When Legacy Tech Is Predatory Tech Too
As an industry, we’ve been kicking the can of legacy technology down the road for a long time. The problem is real and big.
According to statistics gathered by Denise Wymore, president and board chair of the CU De Novo Collective, over 400 credit unions still use one particularly outdated system for their core processing. The vast majority are likely single-sponsor, in particular: teachers – 14; schools – 23; education – 2; employees – 90; police – 13; postal – 12; church – 20; and firemen – 16.
During our CUSS working group meetings, several CEOs of boutique credit unions shared that organizations are being required to pay more than $1 million to cancel core contracts, even when it is two small credit unions merging. Jaws dropped. More than a million dollars? Just to exit? Tyler Valentine, CEO of StagePoint confirmed, “There is not much flexibility from vendors, much less cost reduction because of the size. ” The sentiment was: That’s predatory!
Enter The CUSS Solution
We also realize that it takes scale to achieve profitability and so how can we make it a win / win for our business partners and our credit unions? There are less than 5,000 credit unions in the US and close to 3,000 of them have under $100 million in assets but collectively they represent over $90 billion in assets. That is not a “small” market, in fact it would be the 2nd largest CU in the US, and it would bring power and scale, reducing vulnerability as there is strength in numbers.
MSA used our latest UNDERGROUND working group effort to address this problem head-on. No more kicking that can down the road!
Our vision is to ensure that the unique “people helping people” philosophy is sustainable and not defenseless to bad guys, so credit unions can safely serve consumers with the tools they need to do it. We are well along the way to designing a modernized core with our partners, a sandbox of tech add-ons, plus support services to help credit unions make this critical change.
Our UNDERGROUND meeting on Oct. 26 will announce the structure of the new CUSS solution, which brings together technologists from such leading firms as AWS and Mambu. Oct. 26 will also start the distribution of a whitepaper with details about how credit unions can move forward toward implementing this credit union solution.
Get ready to CUSS with us by registering for the UNDERGROUND on Oct. 26 and also by taking the following key steps today.
1. Think through your current tech stack.
2. Pull out the costs of the technology services. Internal and external.
3. Consider the contracts you have in place and create a timing calendar.
4. Answer the question: What would be my credit union’s motivation for considering a modernized tech stack?
Many skeptics and other well-meaning people in our industry say they will retire before ever doing a core conversion. Others emphatically declare that it’s been tried before and hasn’t worked. I get it, but that was then, and this is now. Too much is at stake. To thrive, to continue to raise the bar on member service, credit unions need to be CUSSing.
Susan Mitchell is CEO of Mitchell, Stankovic & Associates, is on the Board of the Worldwide Foundation and the founder of the Underground Movement.