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Buyer Beware: 5 Red Flags to Watch for During Initial Core Discussions

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The 80s were filled with songs talking about broken promises and failed relationships. Songs like Naked Eyes, Promises and Promises and Fleetwood’s Mac’s Little Lies echoed how relationships aren’t meant for forever when dishonesty is a constant. But we’re not here to dissect 80s hits, although we could easily keep it going! We’re here to talk through how (as is silly as it may seem) a community bank and their core provider is like having a personal relationship built on trust and transparency. And just like a relationship, you have to be cautious when your core provider says all the right things and makes promises that are too good to be true. What exactly are these “promises” or red flags to watch out for to avoid being duped? Let’s look at them below.

  1. They say they have an open API and can integrate with hundreds of providers. 
    Having a large library can seem very attractive, but this is typically said just for a “wow” factor. In our experience with banks, whose previous core boasted this feature, many of these “integrations” are either 1.) Not true integrations, 2.) They are no longer being updated (broken APIs do exist), or 3.) They are not high-quality products. Make sure if this is a selling point that you talk about what integrations you’re interested in and how they would work with your system (i.e., ask for a demo), what the costs would be for an integration within (and outside) the library, and get references to hear another banker’s feedback on the product.

  2. They say everything is included in the total cost/proposal. 
    The products and services that you discussed during initial conversations, hardware costs, training, maintenance fees, and deconversion fees should all be reflected in the total costs, as well as the master agreement. Many times, there are hidden costs in the master agreement that weren’t discussed up front, and you won’t know about them unless you’re looking for them, or until it’s too late. Make sure before you sign anything that your contracts are coterminous and align with your master agreement. Additionally, look for/ask about renewal fees; merger/acquisition costs; product upgrades, enhancements, add-ons, integration costs; and pricing inflation.

  3. They claim they’ve never had a system shutdown or service interruption.
    Every core provider that’s been around awhile has had to deal with a natural disaster or cyberattack that has impacted operations in one way or another. How they handled it is what matters the most. If they handled it successfully, it’s because they had a solid business continuity plan and disaster recovery plan in place, and were able to prevent data loss and minimize disruptions to the bank. They’ll even have proof in a disaster report. Always be wary when a provider says they’ve never had a shutdown or service interruption; you wouldn’t want to be their first client to experience their disaster protocols firsthand.

  4. They show you a generic demo. 
    It’s one thing to watch a product overview online. It’s another to have scheduled time with a salesperson to see how their products work. A core provider’s demo should not only provide you with an inside glimpse into their products and services, but specifically, demos should be about how relevant their products are to your business and how they will benefit your bank and its customers. A great core provider will learn about your needs first and then offer a solution that will work for your bank. If a core provider shows you a generic demo and does the same tap dance they would for another bank, make sure you have your wish list ready and that your needs are addressed. Most importantly, if they show you products and services you don’t think you’ll need, ask if you’ll be charged for them or if they can be removed from your platform. Never make assumptions.

  5. They say termination/non-renewal is easy. 
    Deconversion isn’t the flip of a switch, so don’t believe a core provider when they say terminating a contract is not a big deal. They may include early termination costs and deconversion fees in the master agreement, but may leave out the costs for migrating your data. It’s not unheard of that core providers claim ownership of a bank’s data and hold it hostage if a bank terminates their contract. Make sure in initial discussions you discuss in-depth what deconversion looks like, including associated costs with transitioning and data migration. When you receive the contract, ensure you (or an attorney) review this specific section. If you ever want to move on from your core, you want to have peace of mind that you can walk away without consequences.

Finding a Trusted Core Relationship

Just like any relationship, it takes an effort to find your ideal core provider. They may sound good on paper, and you may have even had a great feeling during initial conversations, but how do you know if they’re just a sheep in wolves’ clothing? We’re not here to tell you to avoid providers altogether−your bank needs a core system to operate! We’re just saying that when you start discussions with a new core provider that you communicate your needs (and stick to them), ask questions when the information you need isn’t readily presented, and avoid making assumptions. Additionally, watch out for salespeople that “tell you” more than “show you.” If anyone that you speak to isn’t initially attentive, responsive, helpful, and transparent, then chances are you can expect that same lack of service throughout your partnership.

At IBT Apps, we lead with our mission of partnering with community banks to serve them the way they serve their customers. We’re honest about the products and services that will benefit your bank. We listen to your needs and work with your bank to provide end-to-end solutions that are updated, secure, and compliant. We have simplified contracts, transparent pricing, and offer the highest-rated support from initial discussions to post-conversion. We work to see your business thrive, no matter the climate.

Ready to partner with a trusted core provider? Let’s start a dialogue.

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This post was previously published as a press release.