John San Filippo
2022 Tekkie Award Winner for Core Integration: TruStone Financial Credit Union
By John San Filippo
In May 2020, Firefly Credit Union ($1.4 billion in assets) and TruStone Financial Credit Union ($1.6 billion in assets) announced their intent to merge, representing the largest merger of equals (MOE) in credit union history. Post-merger, TruStone became the second largest credit union in Minnesota and joined the top 100 nationally, with 23 locations across Minnesota and Wisconsin. Although the first legal day of the merger was January 1, 2021, the first operational day live was March 1, 2021.
Executive Vice President and Chief Technology Officer Gary Jeter, who was with Firefly Credit Union prior to the merger, said that IT teams from both organizations took swift action as soon as the merger was announced. “Once we got through the letter [of] intent, we dove right into [the merger] from a technology perspective,” said Jeter. “We looked at application selection, due diligence as far as costs, contract reviews. Technology was tied right into the entire project.”
Prior to the merger, Firefly was running Fiserv’s XP2 core processing platform, while TruStone Financial was running Symitar’s Episys platform. Although Jeter and other key technologists came from Firefly Credit Union, it was determined that TruStone Financial’s Episys system would be the surviving core. Even so, the technology team was tasked with evaluating each third-party application that was attached to either core to ensure that in every instance, the newly merged credit union would be using a true best-of-breed solution.
“We engaged in massively detailed planning,” said Jeter. “There were 53 applications that needed to touch the core. We had to map each one. That required very detailed planning.” He added that experts from Symitar helped the credit union with integrating applications that were coming over from Firefly’s XP2 platform.
Jeter noted that to expedite the merger, only incumbent solutions were considered. About 60% of those solutions came from TruStone Financial Credit Union, while the other 40% came from Firefly Credit Union.
Beyond third-part integrations, the credit union also had to ensure that all member data was successfully migrated from XP2 to Episys. “We had two dedicated experts from Symitar, one for data validation and one specifically for cards,” added Senior Vice President of Global Planning & Delivery Mayka Thao. “Our data validation was six rounds and manual, so it was very time intensive.” She said that the credit union never rushed data validation because successful, error-free completion of the migration was critical.
To accomplish this goal, the IT department identified a user acceptance testing (UAT) team made up of 52 team members from multiple departments. The UAT team conducted the six rounds of database validations, as noted by Thao. The integration team also performed a mock-conversation two weeks prior to operational day one, which identified risks. As a result, improvements and adjustments were made to the integration plan.
“We did bring in West Monroe [Partners] as a consultant to help us with the merger for both the charter conversion and the data processing conversion,” noted Chief Operating Officer Hans Iverson. “Then internally, we beefed up some project management skills. That really helped us coordinate everything.”
A Better Member Experience
According to Jeter, the merger resulted in technology improvements that benefited members from both credit unions. “From a TruStone perspective, one thing we changed was our e-statement provider,” he noted. “We switched to Xpress Data, which brought us some additional capabilities.” TruStone Financial members were also presented with new branching options by way of Firefly Credit Union’s nine existing branches, as well as the credit union’s first foray into shared branching. This placed 80% of all members within five miles of a TruStone Financial branch.
Jeter added that while Firefly Credit Union was running the second quarter for mobile banking, the newly merged credit union stuck with Jack Henry’s Banno solution, delivering a better member experience for all members.
While there was an inevitable card reissue for Firefly Credit Union members, those members also benefited from an enhanced rewards program tied to their new cards. Furthermore, because Firefly Credit Union mortgages were serviced by a third-party, members had to visit a third-party website to view their mortgage loans. This was all unified on TruStone Financial Credit Union’s digital banking platform.
Merging Two IT Departments
Like Jeter, Thao came to TruStone Financial Credit Union via the merger. Finopotamus asked current CEO Dale Turner to comment on how he was able to successfully merge two IT teams.
“We really used the slogan and lived by the mantra of better together,” said Turner. “It was less about who does what. Our primary focus was from an employee experience perspective. Do we have the need for all this talent? And the answer generally was yes.” He added that there were no forced layoffs, although some team members inevitably opted to move on.
“I think we are somewhere above the 40% range that were filled with internal positions from operational day one to current,” he added, noting that having the right experienced employees in the right positions has allowed the credit union to continue an aggressive growth strategy.
“If you look at the data statistically over the past five years, we're the fastest growing credit union above $1 billion in asset,” said Turner. “So, we knew that we needed the talent. Sometimes you see for-profit shareholder companies that have to decrease the employee expense. We just knew we had to drive more products and services.”
Turner explained that lateral moves were made based on the needs of both the credit union and the employee. “For example, some employees may have moved from technology to finance,” he said. “They may have gone from retail branching to the back office. We really tapped the resources of our team members and utilized them in the best way we could.”
“We like to say we're all TruStone people now,” added Jeter, noting that some positions like Thao’s didn’t even exist at TruStone Financial Credit Union pre-merger. “There have, of course, been challenges, but we believe that our current IT team brought together the best of both credit unions.”