Break Free From Legacy Systems and Upgrade Your Core

By Kelly Flynn, National Director, ADVANTAGE
January 30, 2025

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.

Overcome Barriers to Changing Your Core Processor

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 However, postponing the upgrade only exacerbates the problem if your system is outdated and not well-integrated with the other tech at your organization.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.

Full Team Commitment – Plus Extra Support

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.

Specialized Expertise Offers Bigger Value

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:

• Discovery. First, we learn from you about your current environment, spending time with departments to identify strengths, weaknesses, goals, and objectives. Once aligned, we will work with you to align with vendors that best fit your needs.
• RFPs. Next, we write and distribute requests for proposals (RFPs) to the agreed-upon trusted vendors.
• Selection and evaluation. We evaluate the RFP responses and help your team narrow options by clarifying, guiding, and advising.
• Coordination. We schedule all meetings between your staff, our team, and vendors, including demos and presentations.
• Negotiations. We negotiate with each vendor, using our industry and market knowledge to ensure you receive the best rates.
• Final negotiations. When you have chosen a vendor to proceed with, we complete the “best and final offer” negotiations, contract order, and contract review. After you sign the contract, we transition you to the vendor’s implementation team.

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.

A Core Conversion Success Story

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.

After implementing the new core processor, our client:

• Improved their operating efficiency
• Delivered a better online and mobile banking experience to account holders
• Offered a better solution for commercial loan repayment structures
• Provided more deposit products and services like sweep accounts and rewards checking

Start Thinking Ahead

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.

About ADVANTAGE

ADVANTAGE, powered by JMFA, is dedicated to empowering financial institutions with strategic solutions for growth and success. Our comprehensive services include overdraft program consulting and compliance, checking account acquisition strategies, contract negotiation expertise, and consulting for technology strategy, evaluation and selection. With a rich history of serving credit unions nationwide, we are committed to delivering exceptional value and fostering long-lasting partnerships. Choose ADVANTAGE, to elevate your performance, identify new opportunities, and build more value.