When undertaking a cross-departmental, cumbersome and stressful core conversion, many credit unions look to minimize the amount of change by maintaining third-party platforms, such as statement processors. However one person says all too often, that well-intended approach can cause more harm than good.

Mike Cooper, president of Xpress Data, Inc. (XDI)
Mike Cooper, president of Xpress Data, Inc. (XDI)

“In our experience the idea that fewer changes equals fewer things to manage is frequently not the case,” said Mike Cooper, president of Xpress Data, Inc.(XDI). “If the credit union’s document vendor has little or no experience with the new core, then the problem-avoidance strategy may cause significant issues.”

The San Diego-based XDI counts more than 160 credit union as clients, including People’s First Federal Credit Union and Penn East FCU. Both institutions recently undertook a core conversion migrating to the Corelation, Inc. brand, and during the transition the CUs realized their respective statement-processing vendors over-promised and under-delivered.

“I was trying to keep as many third parties the same through the entire core conversion process to lighten the workload on our staff,” explained Susan Phillips, VP and CIO at People's First FCU. “Our statement-processor vendor told us they would work with our new core to continue to process our statements.”

Susan Phillips, VP and CIO at People's First Federal Credit Union
Susan Phillips, VP and CIO at People's First Federal Credit Union

The $590 million Allentown, Penn.-based People’s First serves more than 65,000 members. On average, the credit union processes approximately 36,000 statements monthly and 58,000 quarterly. After a conference call with the vendor and Corelation, which took place seven months into the core conversion process, Phillips said she had an uneasy feeling.

“I was worried that the project would not be completed in time for our conversion,” recalled Phillips. “After speaking to Corelation, they told me about XDI, a statement processor who was experienced in providing statements for a number of Corelation clients.”

Eleventh hour fail and rescue

Brad Gebert, IT manager at Penn East Federal Credit Union, had a similar experience to Phillips during his CU’s 2016 core conversion. The $170 million-asset Scranton, Penn.-based institution supports 23,000 members, and prints roughly 13,000 statements monthly and 23,000 quarterly.

“The vendor assured us it would be no problem and they quoted us a cost and we agreed on it,” said Gebert.

Seven months before the conversion, the vendor was provided a “spec sheet” and a sample XML file from Corelation, as well as direct contact to a staff member at Corelation, explained Gebert. “They began working on it and never gave us a bit of concern,” he said.

Immediately after the otherwise successful core conversion, the vendor informed Gebert it would not be able to complete the project. This provided his team with just four days to find a solution, as the first post-core conversion statements were due to be sent to members.

Gebert explained that he contacted Corelation “in a panic” to ask for a list of vendors that could process the statement list, and the core processing firm followed up with a list of known vendors.

While a few days may seem like an aggressive deadline, Cooper said XDI’s in-house record for the fastest statement processing was four hours from receipt of a file to having a live production proof ready.

“A more typical core conversion implementation spans two to three months,” he said. “Since XDI serves only credit unions, our team can pull out all the stops and accomplish some remarkable feats when needed.”

For a credit union looking to undertake a core conversion, Gebert shared some advice regarding keeping existing statement-processing platforms versus approaching a new vendor.

“If your vendor is not familiar with the file format the new core provides, get samples in your hands. Do your due diligence sooner than later because even trusted vendors can cause you a headache,” he said. “Bid the process out before even signing with a core. In hindsight, once we narrowed it down to the final cores, I would have liked to have had time to send sample files to the vendor.”