By Roy Urrico
The $607-million Fort Wayne, Ind.-based Partners 1st Federal Credit Union announced its transition to the real-time DNA core platform from Brookfield, Wis.-based Fiserv. The conversion, already in process, will officially take place in April 2024. According to the credit union, the initiative is expected to provide improved operational efficiency and member experiences, robust reporting capabilities, and tighter integration between the core, digital banking, and ancillary solutions.
“We needed to think long-term and sought a partner who can meet our current and future needs, with a proven history of providing value-added new features so we can serve our membership across all channels through an engaging and friction-free experience,” Carla C. Bienz, president and CEO of Partners 1st . “With Fiserv and DNA, we will have an operating system that provides a holistic view of the member and enables our staff to provide targeted, well-informed offerings that deepen the member’s relationship with our credit union.”
Fiserv describes DNA as a modern core account processing platform with an open architecture that makes it easier for financial institutions to integrate other solutions and bring products and services to market quickly.
“Partners 1st wanted a collaborative partner who could deliver the expertise and technology they need to continue to act as a trusted financial advisor to their members,” Chris Van der Stad, general manager of DNA at Fiserv, told Finopotamus. “Fiserv is committed to helping credit unions like Partners 1st continue to serve their members and communities with competitive financial services that meet the heightened expectations of today’s consumers.”
Partners 1st Starts the Conversion Process
Partners 1st, which serves more than 46,000 members and 25 offices across the U.S., began its search for a new core in 2022. “We have been with our current core over 25 years,” said Bienz. “We had a long, nice relationship, but we have definitely outgrown (it). It is more of a legacy core.”
Bienz explained the credit union sought a more up-to-date and open system. “And we definitely wanted to stop being so good at workarounds.” In other words, the credit union wanted a core system that enabled technology , instead of credit union personnel figuring out ways to work around system limitations.
In addition, Partners 1st sought a core system that could help them with a much more robust lending system on the front end. Noted Bienz, “We have a very large indirect program, same with our mortgage, both held and sold in the secondary market. And we are building a business lending and deposit area.”
Partners 1st spent a good portion of 2022 going through the request for proposal (RFP) process and vetting core processing systems that could deliver on their objectives. “We chose DNA last August, and went through the process of working through contracts and getting (conversion) teams together,” added the president/CEO.
Getting the Data Ready
“We have been going down this (conversion) path since late December (2022), early January,” explained Bienz. The first major task is getting ready to map data for the first data cut due in June. “Next month we will have a team here from Fiserv to help us with mapping the data.”
Added Van der Stad, “The first tactical thing is really understanding the data condition and making sure we can take opportunities to clean up any data should we need to as part of that that first data cut, that data migration phase.”
Van der Stad explained that a “data cut” takes a data extract from the current core software, then puts it through the data conversion processes to migrate the data into DNA for client validation. “To enable options to tweak product configurations and improve the end result, we do a few of these data cuts during an implementation program.”
The conversion teams anticipate four total data cuts, including a mock conversion in March 2024, and then the full conversion in April 2024. “We have a busy year ahead,” said Bienz.
Fiserv’s Proactive Conversion Approach
Fiserv takes a proactive hybrid approach to conversions using both remote progressions and some in-person events to get the data and processes correctly lined up. “We typically can get pretty good fairly quickly on the data migration aspects. Then fine tune it right over the course of the rest of the project," Van der Stad said. “But it is more about making sure we understand what we want to improve and start to change to take advantage of the benefits.”
Van der Stad noted Fiserv typically fulfills two kinds of roles during conversion. “There's a program manager role, which is more focused on third parties and other integration points. Then we have a project manager that is focused on the DNA aspects of the project. It is a definitely a team effort to deeply partner with Partners 1st.”
Credit Union Expectations
Partners 1st initially anticipated bringing a new core system in house, but after evaluating the options, the credit union chose a hosted DNA environment. “Once we sat down in the discovery stages and talked with Fiserv, we made an easy decision to go cloud-based,” said Bienz.
Bienz inicated Fiserv emphasized the redundancy and recovery aspects of a cloud-based system. “We looked at what Fiserv can provide through the data center versus what we could provide. We have always been in house, so it is interesting how we very quickly pivoted.”
Partners 1st FCU expects a new technology era to begin at the credit union in April 2024. Bienz told Finopotamus “just the efficiencies we will get from an open and new system will remove a lot of the friction that currently exists, especially in the lending area.”
DNA will allow the entire credit union lending platform to operate from the core. Bienz said, “Right now we have third parties or other software. So, we cannot always have a vision into what is going on between departments.” She anticipates with DNA, “We are going to have the ability for us to decide how we want to run our organization versus having it limited by the ability of the software.”
What is Real-Time and Open?
Van der Stad explained to Finopotamus the “real-time” in the DNA platform allows systems to operate throughout the evening when credit unions run their of end of day processing and also has the capability to accept transactions as they happen through digital experiences. “We call it ‘virtual end of day,’ but it’s the ability to accept any transaction at any time of day, and make sure that the core can continue to service those transactions.”
Then there are the open core capabilities. “We are eager to work with anybody and support our clients, (like Partners 1st), by working with any fintechs. Going into this (open environment) space is exciting for Fiserv. We are looking to enhance our systems to really enable the openness, but more importantly the speed,” Van der Stad said.
In terms of openness, Van der Stad suggested, “It is not good enough to have application programming interfaces (APIs). You need APIs that can be adopted quickly and get products to market quickly. That is one of the things that Carla (Bienz) and I talked about in Partners 1st. We wanted to make sure as part of the upfront discussions we both had the confidence we could get there. It is not good enough to just have it, you need to get (to market) quickly and confidently.”
One of the main reasons Partners 1st selected the DNA platform was the robust lending platform it brings. Van der Stad said, “I think it is one of the strengths of DNA is the universal lending platform we have. I always get excited when I know clients are going to leverage it to its extreme and really take advantage of it.” That includes large commercial and small business lending.
“We're excited,” noted Bienz. “It is very nice on the front end, but that lending platform is very robust. We much prefer to have the options of choosing how we run our system, not have the system tell us.”
Conversions Everywhere All at Once
Founded in 1952 by seven workers, Partners 1st began as Magnavox Employees Federal Credit Union in Fort Wayne to provide low cost loans and encourage savings. In the early 1970s, the credit union operated three in-plant branches, primarily in other Magnavox facilities. From these early stages, the credit union progressed into a national branching network. When North American Philips Corporation acquired Magnavox in 1975 the credit union changed its name to North American Philips Federal Credit Union and then later to Philips Federal Credit Union.
In 2006, the credit union was renamed to Partners 1st Federal Credit Union. This new name, not tied to any affiliation, allowed the credit union to expand into other companies, other communities and merge in other credit unions. The credit union serves select employee groups (SEGs), select association groups (SAGs), and several community areas through community development finance institution (CDFI) charters all over the country. Most branches are centered in Indiana, Virginia, West Virginia, Ohio, and Maryland.
Not only does Partners 1st have to plan for its main branch in Fort Wayne, Ind. but for the 25 branches around the country as well. “Everybody'll be going through the conversion simultaneously. So that puts a real emphasis on our training team and making sure that we are well trained and have good subject matter experts to assist on day one,” said Bienz.