Initiating the Process
Once a new business partner has been selected the conversion process begins. Most financial institutions in today’s economy do not have the extra staff to devote to the full-time task of converting a core system. When a conversion doesn't meet up to the financial institutions expectations it has a lasting impact on the business relationship with your new partner. No one will remember that 90% of the conversion went very well. It is the last 10% that gets remembered for the duration of the contract. More importantly your customers or members will remember the 10% and how it impacted them and how they view their relationship with your institution.
Small Mistakes can be Costly
Core processors today know how their side of the conversion will work. If they are successful in today’s market they most likely have converted many institutions using a well-established project plan. Where things can go very wrong is in the non-routine details that get overlooked.
For example a $400 million savings bank thought their ATM program was based entirely on a four-digit PIN. No one remembered that the bank they had acquired some years ago had five-digit PINs. Their previous core processor had added custom code to allow a five-digit PIN to work. The result was after conversion those customer cards with the five-digit PIN did not work. Their overall conversion was successful to 80% of their customer base; but what about the other 20%, some of which were out of the country and reliant on their plastics.
Additional Risk Areas
Other areas of risk for the converting institution are in data verification, training and third party integration. The latter is an often overlooked source of additional costs, delays and frustration. Insuring that the third parties are integrated into the project planning is critical to the overall success of the project. Data verification is incumbent on the converting institution staff to make sure that fields from the current system are being mapped to the new system correctly by the conversion programmers. This is a tedious, time-consuming project that needs to be managed for conversion success.
Internal and External Communications are Critical
Last but not least, your customer or member base will also judge the success of the conversion by your staff’s approach. What will you communicate to them prior to the conversion? Are your monthly statements changing? Will they be getting new ATM cards? What touch points are changing or being enhanced? How will you communicate changes internally? When conversion day hits and a teller has a problem or is slow to service a customer or member, the situation can go one of two ways. The teller can say “I don’t know why we made this change” or say, “this new system has a lot of features to allow us to serve you better”. Which impression do you want the individual to take away from your branch?
This starts at the top in communicating the benefits of making the change. A majority of your staff have had no involvement in the selection process and may not see the benefits of the change. All they know is that the way they have done their job for years is now different and new.
The FCS Advantage
Financial Core Strategies (FCS) can provide management oversight for the project to supplement the financial institutions' team, insure that the project plan remains on track and reduce risk with the new core processor. FCS staff has managed over 100 financial institution conversions from De Novo banks to $3 billion in assets and credit unions from $20 million over $600 million in assets. We will customize the level of assistance you require to have a successful conversion and stay within your budget.