Changing customer banking habits means it’s more important than ever for community banks to use every tool at their disposal. The good news is that those tools might already be at their fingertips.
By Katie Kuehner-Hebert
Community banks may have longstanding relationships with their core vendors, but that doesn’t always mean they keep up to date on all the latest features and functionalities.
“Some bankers ask us why we don’t have a particular functionality, and we tell them that we’ve actually had it for years,” says Stacey Zengel, senior vice president of Jack Henry & Associates, Inc. and president of Jack Henry Banking, based in Monett, Mo.
“Post-pandemic, many banks are now figuring out how to drive revenue and how to become more efficient,” Zengel adds. “But a lot of times banks could accomplish these things if they use the tools they already have.”
Not keeping up with a core vendor’s releases can also be costly to a community bank if it doesn’t leverage them, as releases often provide critical and important regulatory, compliance and feature function updates, says Maria Schuld, division executive, Americas Banking Solutions at FIS, which is headquartered in Jacksonville, Fla.
“This could also mean losing out on different sources of revenues,” says Schuld, who is based in Milwaukee, Wis. “Improved or new feature functions can be a source of competitor differentiation and bring new customers to the bank, as well as giving a bank the tools to create deeper relationships with their existing customers.”
Here are four ways to keep up to date with your core.
1. Designate a core expert on staff
Banks should consider having someone within the organization who is focused on using everything their core vendor offers, Schuld says.
When looking at core modernization, having a transformation roadmap is important, and that includes having the right people in place. Banks that have more complex business models should consider adding specialized core experts for business lines that are particularly critical for the institution, in addition to having an expert serve as a liaison for more generalized functions, says Charles Potts, ICBA senior vice president and chief innovation officer.
“The people who are closest to the customer need to understand and offer suggestions on implementation, function and communication.”
—Mike Daniels, Nicolet National Bank
Nicolet National Bank in Green Bay, Wis., takes a more decentralized approach to working with its core vendor, Fiserv Inc., based in Brookfield, Wis. That’s according to Mike Daniels, president and CEO of the $4.5 billion-asset community bank.
“Our thought is that the people who are closest to the customer need to understand and offer suggestions on implementation, function and communication,” he says. “Our operations and IT teams are the ones who stay current on product releases and help support the products. They work with the front lines to ensure clear communication about potential customer impacts.”
2. Meet regularly with your core vendor
Community banks should be proactive in working with their core relationship executive by regularly scheduling technology utilization reviews, according to Deborah Matthews Phillips, ICBA senior vice president, payments and technology policy. These reviews should involve staff from both the bank and the core provider to assess how current systems are used and to ensure the bank receives timely updates on planned product roadmaps.
For Jack Henry’s bank clients, says Zengel, relationship managers assigned to their accounts conduct annual customer profile reviews. They use this time to suggest new releases that could help clients’ operations or business models or explain how to better leverage features and functionalities they already have but are not using.
Nicolet National Bank’s team routinely attends training sessions co-hosted by Fiserv and maintains regular dialogue with Fiserv “to ensure alignment between their services and our strategies,” Daniels says. The community bank’s processor, United Financial Services, sends regular enhancement requests to Fiserv on the bank’s behalf when it finds opportunities for improvement.
Nicolet also uses a number of ancillary products that Fiserv offers and receives regular communications about new products and upcoming releases. “This allows us to learn more about the current offerings and also about what is coming next on Fiserv’s roadmap,” Daniels says.
3. Participate in the core vendor’s roundtables, user groups and conferences
Twice a year, Jack Henry conducts “fireside chats” via WebEx or Zoom meetings, reviewing with bankers how to implement its products’ most popular features and functionalities, Zengel says. At the end of each session, bankers are encouraged to ask questions. Clients can also network with one another in regional user groups, via phone or in person. Moreover, the core vendor hosts annual educational conferences on its existing products and highlights what’s on tap.
4. Leverage ICBA resources
ICBA offers a Core Processor Resource Guide that includes steps community banks should take to evaluate their core processor, such as assessing the bank’s business needs and use of systems; learning the core processor’s philosophies; gauging satisfaction with the current core relationship; and evaluating core processor alternatives, including innovation, compliance, and legacy vs. next-generation providers. It also offers insights into negotiating contracts and core conversion project management for community banks that decide to switch systems.
Participating in ICBA’s ThinkTECH Accelerator can also help banks “bridge the technology gap” by learning how they can augment or supplement their existing cores, Potts says.
“Banks may want to move to a level of specificity beyond what their core vendor may be offering,” he adds. “We also help them work with their core vendor to support any third-party product. This does require a bank to have a very good relationship with their core vendor, so they can talk strategically about their needs.”
Katie Kuehner-Hebert is a writer in California.