As a CUSO, we are committed to servicing all our credit union owners and those who utilize our services. While a “one size fits all” service model can have its benefits to a cooperative, it is often the case that this does not meet the distinct needs of our credit unions and their members. One way to handle diverse membership needs is to consider multiple vendors and partnerships for any given service offered as a CUSO.
When it comes to loan origination, payment services, item Processing, EFT, or any other solution, there are many partnerships to be had. Each CUSO builds a new value proposition by creating a set of features that are attractive to credit unions by lining up the differences of each partnership with the needs of the credit union.
When evaluating new service offerings, each option will be considered based on benefits to the member, value to the credit union, cost of integration and service, and a host of other criteria. As a CUSO, we owe it to our owners to be flexible enough on our offerings to give them options that line up with their specific requirements today as well as tomorrow. We also owe it to ourselves to make sure that we can sustainably support more than one vendor or partnership for each service we provide, where deemed necessary.
The benefits of diversity
By having options for service vendors, we can offer different feature sets and price points. For smaller credit unions with straightforward needs, it may be more important to keep the feature set small and the price low. Having multiple vendor options within your CUSO can open opportunities for tiered pricing structures with expanded feature sets that a credit union can grow into at its own pace.
Our landscape is always shifting. In some cases, the partnerships we have today won’t be the ones we have tomorrow. By constantly evaluating who we partner with and collaborating with multiple vendors, we have a better chance of keeping up with innovation while not disrupting well-established and stable processes. We also buy ourselves a little insurance by being able to change vendors more quickly should a vendor cease to be a viable option.
Our customers love options, but there is a downside. The cost of development for supporting multiple service vendors can rise if the feature set of each vendor varies too much. Data exchanges between credit union core data, your CUSO services, and each vendor may be drastically different. Member experiences may need custom interfaces to open additional features for a vendor and this can increase the complexity of the configuration needed, further increasing development and support costs. More options increase the complexity of your integrations.
Onboarding processes and timelines can vary. You will need to make sure that your support staff understands the nuances of not only your CUSO features but the differences between vendors. You will need to provide vendor-specific training and make sure that you have created appropriate tools and processes to work with the integration of each vendor that you support.
Even if you plan from day one to offer multiple vendor options for a service, you will forever be required to make sure that adding or removing vendors in the future does not disrupt your ability to support your current vendors. This can be an ongoing challenge, especially when you need to change rapidly.
Things to consider
Once you have settled on a set of services you wish to offer as a CUSO and determined that you need to support multiple vendor partnerships to provide them, there are a number of things you should consider:
- Plan for diversity. There are a lot of upsides to having multiple vendors. You will be able to better serve your customers if you can give them options.
- Focus on your primary service offering and minimize the differences that you expose to the credit union and its members between vendors. This will help keep your development and support costs manageable.
- Clearly define the feature set that you offer and how it varies by which vendor is selected. This will help you set clear expectations with your credit unions on what they are getting with the vendor they select and will help show them options when their needs change.
- Build diversity into your processes and training. Understand what each vendor has in common and what is different.
- Sunset things that keep you from moving forward. All services have a lifetime and when that time comes, make sure that they don’t hold you back.
One size does not fit all
In an incredibly happy world, we would always have perfect partnerships that exactly meet our needs. In the absence of those, it is up to us as a CUSO to make sure that we diversify our vendor relationships in ways that allow us to best service the credit unions we represent. Giving a menu of options to our credit unions will allow them to meet their needs today but will also support them going forward as their specific needs evolve.