TUKWILA, Wash. — At least one credit union said it is scrambling to ensure mobile banking applications keep running — and a CUSO that supports many CUs stopped testing its applications — after apparently being told that their provider, Firethorn Holdings, LLC, will shut down Sept. 30.
Firethorn's parent company, however, denied any such shutdown is planned.
"It's a big deal," said Howie Wu, VP-virtual banking at $9.2-billion BECU. "We're crossing fingers that there's no disruption to the Firethorn applications before we deploy our replacement. A group of us is pushing for an extension until the end of the year, and I'm fairly confident Firethorn will agree."
Firethorn provides mobile banking applications and person-to-person payments to more than 3,700 FIs, including the $5-billion San Diego County CU, $4.9-billion America First, the $3.6-billion PSECU, and the $1.3-billion University FCU.
CU*Answers, the Grand Rapids, Mich.-based CUSO provider of technology solutions to 165 CUs, is also a Firethorn client. But Andy McGowan, director of communications for Firethorn's parent, Qualcomm, Inc., told Credit Union Journal, "Presently, Firethorn continues to operate its mobile banking business. Firethorn is not ceasing operations."
Neither the Qualcomm nor Firethorn website indicates that Atlanta-based Firethorn will turn off the lights.
Wu, however, said Firethorn told BECU in December that Firethorn would close its doors Sept. 30, adding that 50% of Firethorn's staff had already moved on. "If something happens to our Firethorn applications, we won't be able to get Firethorn to help us," Wu said.
BECU wasted no time finding a replacement to deliver its iPhone and Android mobile applications, continued Wu. After squeezing the RFP process into two months, BECU settled in February on ClairMail, of San Rafael, Calif.
BECU plans to seamlessly switch members to the ClairMail-powered applications as a standard update by August 15, said Wu. "This project just became number-one on our IT docket. It's particularly unfortunate because we'd been live with Firethorn for only five months."
BECU's mobile-browser, wireless application protocol (WAP) banking site does not run on Firethorn and will continue to function as normal, he said.
CU*Answers was in the midst of a proof-of-concept for a consumer mobile banking app with Firethorn when the company told the CUSO it was shutting down, said Rachel King, CU*Answers' sales administrator. "But the deployment was on a very small and defined scale, so the immediate impact and interruption was basically a non-event."
Still, CU*Answers will have to delay its mobile app offering, King said. The CUSO will continue work on an SMS text-messaging banking application. Though the CUSO was planning to use Firethorn as an SMS gateway, Firethorn will help the CUSO go directly to market with an in-house solution instead, perhaps this month, she added.
The CU*Answers Mobile Web product, a WAP banking product developed by the CUSO and optimized for smartphone browsers, is not associated with Firethorn, said King.
The Firethorn transition is "bad timing, but it will be a huge win for the membership," said Wu. BECU will save 15% in service fees with ClairMail and will be able to offer greater functionality.
Meanwhile, Wu added. "We're not messing with the applications. There'll be no enhancements. We were lucky there was no impact when Apple released its new iOS update in March."
Expect continued shakedowns in the mobile space, he suggested. "Mobile is not mature."