The bulk of the banking industry may work with the big three core providers—FIS, Fiserv or Jack Henry & Associates—but some banks are finding that smaller, boutique providers can be the better fit. That’s the case for $3 billion asset CNB Financial Corp., based in Clearfield, Pennsylvania, which made the switch from its big core provider a little more than two years ago to one that’s smaller, nimbler and more willing to collaborate with its client banks.
“We’re not a change agent by any means, but we’re constantly changing and evolving to what we believe the clients need and what our markets want, and when we talked with our prior provider, they didn’t have that same impetus,” says CNB CEO Joe Bower. “Customer experience wasn’t their focus.”
So the bank began a long and exhaustive search, spending 18 months exploring 11 different core providers, including the big three. COCC, a client-owned, cooperative core platform in Southington, Connecticut, won the contract.
The ability for CNB to be part-owners of COCC played a role in that decision: As owners, the provider’s clients have a larger voice, so advocating for a new feature is an easier process than CNB experienced with its former provider, which would demand money up front and put the request in a queue. Research and development on new features was charged by the hour. The process was slow and expensive. Enhancements to CNB’s mobile banking platform were expected to be a two-year project with the old core provider, for example.
Now, “action begins to take place almost immediately,” says Bower.
This isn’t because CNB is a bigger fish for COCC—Bower says the core provider is just as responsive to smaller client institutions with good ideas. And any new feature is then available to all COCC users, so everyone benefits.
And Bower says COCC’s proactive approach to innovation and the deployment of new technology played a role in its selection as CNB’s core. “We were looking for somebody [that] wasn’t stuck in their ways or too large to make major changes within their structure,” he says.
Perhaps because of this, COCC is open to working with startup technology providers and is nimble enough to vet them quickly. COCC directly partners with startups, and along with COCC’s own capabilities, it helps CNB get new features to market more quickly. For a technology company that’s not one of COCC’s partners, but rather the bank’s vendor, the core still coordinates integration efforts. CNB has experienced at least two fairly large integrations with outside technology firms—a commercial underwriting platform and a new peer-to-peer (P2P) payments solution.
“When new ideas surface—whether it’s from us or a small fintech startup—they’re nimble enough to take a look at it, review it and within months, as opposed to years, if we all feel like it’s a direction we ought to take, it happens, it comes aboard,” says Bowers.
Converting to COCC from its older core was more challenging in today’s 24/7 economy. CNB started fresh, converting everything—including its online and mobile banking platform—and timing this to ensure minimal disruption to customers was difficult. The core conversion began on a Friday in May 2016, and the bank and COCC only had until the following Monday to work out any major bugs. While the initial conversion went off without a hitch, dealing with smaller issues impacting a small percentage of customers at a time—problems with money transfers, incorrect statement descriptions, misapplied fees—kept bank staff busy long after the initial implementation.
“I would estimate close to 12 full months where your eye comes off the ball a bit in regards to new client acquisition, continuing to grow your assets—some of that has to take a back seat for a while,” says Bower.
Despite the conversion headaches, all-in-all Bowers says it was worth the hassle. “We’re a much better company today than we were before the transition,” he says. “Because of our ability to offer more programs, have better say in what happens with our core processor, and what services and what our client actually sees is something we [now] have some control [over].”
And the improvements aren’t just due to working with a core provider more suited to CNB’s business and strategy. Providing a better customer experience was a key driver in its decision to move to COCC, but the bank did some soul searching and realized that like its former core provider, it wasn’t thinking through the customer journey, either. So, roughly four years ago, Bowers put an executive in charge of the customer experience, promoting Leanne Kassab, who has a background in marketing, to a new position as executive vice president of customer experience and marketing. It’s position more commonly referred to as a customer experience officer, or CXO. In her role, she maps out every experience a customer could have with the bank to identify where to improve each process. She also oversees internal and external communications, and is in charge of the bank’s marketing department and call center.
Kassab also established employee task force groups to focus on different areas of the customer experience—the bank’s branches, commercial banking, new customers and existing clients—as well as employee training. These groups have been so successful that the bank’s human resources head borrowed the idea to create groups focused on the employee experience.
The bank has also changed its training programs to focus more on the client, rather than solely on operations. “We want the employees to understand the first onus on us is customer satisfaction,” says Bowers.
Bowers admits that better communication could have improved the relationship with its former provider, and his team actively works to keep the communication lines open with COCC. The bank participates in a commercial-banking roundtable to weigh in on future projects and frequently participates in user group meetings. Bowers has biannual conversations with COCC executives.
But perhaps most importantly, CNB chose to focus a junior executive on fostering a direct relationship through weekly communication with COCC. She’s newer to banking, and Bower says this fresh perspective is a benefit. She runs the bank’s e-solutions, managing what the customer sees online. Because of this, Bowers believes her perspective on new products, services and ideas inherently includes what the customer reaction could be—and she can communicate that to COCC.
Putting more effort into communicating with its core provider has created a more fruitful relationship, says Bower. “They understand where we want to be, and they understand where we think they ought to be in the world of banking today.”