Credit unions are struggling with their vendors more than at any time in the past, and this pain has increased just when technology has become the most important strategic challenge in our industry. The root cause of this struggle is not that vendors have bad intentions or lack competence. Vendors are struggling to deliver because they are dealing with the same pace of change and complex technical mandates that all businesses are facing, and they are fighting for talent that would much rather work in industries like software, gaming and e-commerce than good old banking.

CUs and vendors are cramming to learn about digital delivery, sophisticated analytics, robotic processes and API-integrated systems while operating legacy businesses. But when it comes to new technology, for all but the top 20 banks, building new, large-scale systems is cost prohibitive and fraught with risk, while the “buy” marketplace is full of half-finished solutions, unkept promises, and vendors’ tepid willingness to integrate other systems.

In this environment, CUs need to carefully buy solutions in the vendor market, demand stronger vendor performance, and look for systems that can easily be configured or customized to the bank’s needs. At the same time, they must learn how to build the system integrations, customizations and analytic capabilities around the vendor solutions they buy.

continue reading »