Corporate Shuffle: Questions To Ask When Searching For Alternative Providers
December 3, 2010
Many credit unions rely on the corporate credit union system for mission-critical functions; however, changes in the corporate system are imminent.
Alternative providers could possibly include other corporates, newly formed CUSOs, the Federal Reserve, large banks and publicly held companies. It is important to objectively evaluate each on their real merits.
Following are just a few questions you may want to consider:
- What are the three top decision drivers for evaluating various service providers?
- What are potential threats to your credit union’s business model? (e.g., if your credit union has high loan demand and your corporate provided a line of credit, what are alternatives?
- What strategic initiatives are you willing to forego during this service conversion?
- What will be the hard-dollar cost of the conversion? Have you budgeted for it?
- Will the shift be transparent or nearly transparent to members?
Invest the appropriate time to create an RFP that details your requirements and rank them in importance with a weighting system, such as a scale of 1 to 10. A few examples of requirements you may consider weighting include:
- Necessity of investing upfront capital to receive services
- Cost to process ACH transactions
- At least __ years of previous demonstrated financial strength
