Market pressures force credit union to overhaul IT systems

Wollongong-based retail loan provider City Coast Credit Union has overhauled its entire software and hardware infrastructure as part of a multimillion-dollar business transformation strategy to better position the company in a tighter financial services market.

Over the past two years, the company has been migrating from mainframe-based transaction processing systems to what it regards as a "world-class" IT infrastructure, designed to automate every business process in the organisation and ready employees for e-commerce-based service delivery.

The company's manager of corporate services, John Tancevski, said that over the last five years the organisation has faced fierce market pressures from the deregulation of the retail financial services sector, from globalisation through e-commerce, and from increased local competition from relatively new credit providers like Aussie Home Loans, RAMS, Mortgage Choice, Telstra Online and NRMA.

"All of these factors have been squeezing retail financial lending institutions' margins," he said.

Contrary to the popular perception that technology "solves" business problems, Tancevski stressed that competitive edge lies not in IT or "computer replacements", but in aligning an organisation's people, processes and systems to technology.

"The whole notion of e-commerce had been a concern for us, because it meant we had to Web-enable all our business processes. But we realised that through e-commerce we could differentiate ourselves through different service channels, and by taking the customer out of [laborious] paper trails for processing transactions," he explained.

"Customer-relationship management in particular is essential to us and we merely use software, for example, as a service-enabler."

In August, City Coast went live with a first-time, mission-critical retail finance system. The business replaced a 30-year-old mainframe-based transaction-processing system with FISERV ICBS, an international core banking solution developed by Australia's Credit Union Movement and retail financial solutions vendor FISERV.

Under City Coast's IT facelift, the company also replaced Secoya mainframe machines with an IBM AS/400 hardware platform for around 100 employees.

City Coast outsourced IT services to KAZ Computer Services under a $5 million facilities-management agreement to manage its two new AS/400 machines for five years, as well as the FISERV ICBS and WANS solutions, and to provide strategic consulting.

FISERV ICBS provides users with a unified view of all customer transactions with the business, showing clients' every touch point with City Coast employees, as opposed to the previous in-house system which only showed single, service-based transactions for savings, loans or credit.

KAZ also ensured that it linked the company's AS/400 environment with the systems of suppliers such as FDRA, CUSCAL, QM Industries and Decision Advantage.

Also key to City Coast's business turnaround was a new Computer Associates general ledger system, Masterbiz, implemented to manage all front-office customer-oriented interaction.

While Tancevski says it is still early days for the "new-look" City Coast, he says the project has streamlined the customer interaction process. "It has eliminated vast amounts of paperwork previously needed for transactions like account queries or credit applications and tracking.

"Our staff have redirected their efforts into more value-add areas like tracking customer queries logged in our system, addressing their complaints or building records of their feedback. Now we have no limit in service. This is all about thriving in a crowded marketplace," he said.

Tancevski expects current annual revenues of $30 million to grow by 10 to 15 per cent over the next few years as a result of the technology overhaul. He added that the company will see a complete payback in three to five years, without the need for any significant addition to headcount to accommodate sales growth.

Meanwhile, City Coast is poised to launch an e-commerce arm -- the Credit Union Wealth Creation Portal -- over the next year, which he said will allow for business-to-consumer and business-to-business transactions.

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