Use This Checklist to Select Your New Financial Institution System

  • Technology
  • 3/13/2017
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The search for a new system should start 12 to 18 months before your current vendor technology contract expires. Our checklist can help break down the selection process.

Recently, I worked with a financial institution client who was unsatisfied with their current in-house system and wanted to begin the search for an outsourced solution. Before we met, the client had several meetings with various vendors and already had their first choice in mind. Since the client had pre-determined a lead vendor, they expected to shorten their selection timeline.

Our checklist runs through each step of the selection process as you search for and evaluate different vendors’ systems.

But as we worked through the key steps to selecting a new system, we learned that their lead vendor wasn’t a good fit for the institution; the vendor’s system didn’t offer the required functionality, wasn’t cost-effective, and the vendor did not appeal as a good partner. After extensive due diligence, and by following a carefully planned approach, the client selected a system and vendor that they had not engaged in their initial search, but that met their needs functionally and financially for the future and offered the partnership they required. Had they not taken the time for a thorough review, they may have selected a system that not only wasn’t a good fit, but could have hindered their achievement of strategic initiatives.

Take the time to select the right core processing or ancillary system

Core processing and ancillary system contracts are usually the largest and most complex technology contracts you will sign, and they can be the most significant strategic and financial investment your institution will make. Whether you are looking to replace a current system such as core processing, implement a new system such as mobile capture, or roll out an updated system such as EFT, plan to begin the selection process at least 12 to 18 months prior to your current system’s contract termination.

As a consultant, I’ve worked with clients who, at the onset of selecting a new system, questioned why the process takes so long. However, they soon realized the value of taking the time to thoroughly assess their needs, perform system analysis, and conduct due diligence. Had they not taken the time, they would have overlooked critical system functions, lost negotiation power, and ultimately paid more than what they should. By following a set process, they were able to achieve significant savings, attain specific contract terms and service level agreements, and resolve issues related to the current product’s service delivery, functionality, and support.

How we can help

A well-selected system can result in internal efficiencies, as well as increased satisfaction. Avoid making a quick decision based upon internal struggles, vendor pressure, or other factors, and be prepared for the conversion of a system to take 6 to 12 months to complete, depending upon the complexity and the vendor’s conversion schedule.

CliftonLarsonAllen (CLA) works with financial institutions through a carefully planned and diligently followed system assessment and selection process to help you reduce costs and set performance expectations. Our process can help you meet strategic initiatives and avoid selecting a system that could pose a negative impact or cause adverse conditions in your institution.

View the Checklist

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment or tax advice or opinion provided by CliftonLarsonAllen LLP (CliftonLarsonAllen) to the reader. CliftonLarsonAllen cannot and does not provide legal advice. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of nontax and other tax factors if any action is to be contemplated. The reader should contact his or her CliftonLarsonAllen or other tax professional prior to taking any action based upon this information. CliftonLarsonAllen assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

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