Credit Unions’ Future is in Functional Technology and Data
United Solutions Company recommends credit unions utilize cloud environments for redundancy and hyper-converged tech for simplicity and scalability.
Plus, United Solutions launches truly free advising service
When asked about the state of credit union technology, Jim Giacobbe President/CEO of United Solutions Company (USC) gave the analysis, “The biggest disparity between large and small credit unions is in the IT Department. Most larger credit unions have enterprise equipment, miles of security software, and staff capable of running an efficient 24x7 operation.”
Giacobbe recommended credit unions take advantage of private and hybrid cloud environments. United Solutions, which is a CUSO that provides functional core data processing services and more to credit unions, has been operating out of a private cloud since 1983; before the term cloud existed. “We’re seeing a shift toward cloud infrastructure, including a lot of hybrids that mix on premises platforms with third-party public cloud services, such as Microsoft Office 365."
“Cloud environments are critical for redundant communications,” according to Giacobbe. Running multiple data centers and having clients in 26 states, cloud-based phone, email, and texting systems ensure communications are not vulnerable to local issues. In the event of a disaster, many cloud-based solutions help mitigate service interruptions since these solutions aren’t bound geographically, and often provide redundancy and high availability.
“We are also seeing a shift to hyper-converged technology in credit unions,” Giacobbe explained. Instead of a computer room stacked floor to ceiling with servers, businesses started to move to what is now considered a traditional model. In this model, the CPU and storage are separate, and storage area networks and server virtualization are managed with software like VMWare and Hyper-V. Today, the hyper-converged model combines the storage, computing, and networking into a single system. “These solutions are very scalable and reduce complexity, allowing credit unions to run server virtualization across many hyper-converged appliances,” stated Giacobbe.
With the advances in technology, credit unions are storing and accessing more data than ever. However, the problem now becomes knowing what questions to ask, while creating pragmatic reports and data stores that credit unions can use and understand. “Credit unions have tons of member data but digging out the valuable nuggets can be a challenge,” Giacobbe stated. “United Solutions is working to clear through the wheat and chaff for credit unions so that our credit unions grow and remain competitive.” United Solutions created a business intelligence program that is free to its client credit unions. United Solutions started off with 10 business intelligence reports they knew were of value, and then explained to the credit unions how to use them. For instance, one report showed a credit union it had $12 million leaving the credit union each month to pay other financial institutions; many of those were credit unions that had similar products and services.
“Once you discover information like that, you can act on it. Members were sending money to other credit unions to pay for loans or put money in another family member’s account,” Giacobbe explained. The credit union, working with United Solutions, began to run soft credit bureau pulls on those accounts to make an offer to refinance the loans at a better rate for the member, which brought revenue back to the credit union. United Solutions is now working on 13 new reports that will offer additional data to help its credit union clients compete.
Integration is a key component to the CUSO. As credit union systems become more complicated, having a business partner like United Solutions that can seamlessly handle system integration is huge. “We do more than core processing at United Solutions. We also provide full network services, optical and imaging systems, scanning equipment, collections and more.”
In 2018, United Solutions released its new CU Assured cybersecurity product that streamlines everything onto one screen, including asset discovery, vulnerability assessment, intrusion detection, behavioral monitoring, log management, ticket tracking and compliance reporting. United Solutions continued developing and created its OnCore Platform built around Apple Incorporated technology. From OnCore, United Solutions launched its forms product, on-boarding software and loan pricing module. Giacobbe states, “Our OnCore Products add great value to our core systems. We are working on two new products that we believe will have a big impact with our credit unions.”
United Solutions is regularly looking at ways to help its credit unions. In 2018, United Solutions created two new services: XP2 Community Forum and the Credit Union Rescue Team. The Credit Union Rescue Team program is designed to help credit unions that are struggling and just need good advice. The company immediately rounded up 10 advisers comprising credit union executives with various areas of expertise and created a platform for idea exchange and mentoring. Current credit union executives can ask questions and receive coaching anonymously and free of charge through the platform. The anonymity frees executives from the worry of merger solicitation or vendor sales pitches – a truly free service.
Collaboration is at the heart of the CUSO model. United Solutions understands it can’t be successful for its credit union clients on its own. The company sees collaborating with strong strategic partners as critical for the future, as should credit unions. Giacobbe explains, “We partner because we can’t do everything ourselves. We have a lot of good products and services, but we look for others who offer excellent products (that provide value to our client credit unions) and vet them heavily.”
When Giacobbe first came to United Solutions, retiring CEO Ray Cromer Jr., said he was making the ‘mistake’ of trying to figure out how to drive more revenue to the business. Ray calmly explained that the CUSO’s job was not necessarily to earn money but to make credit unions’ lives easier. It’s a lesson Giacobbe took to heart.