In a bid to cut its IT costs in half, a network of B.C credit unions announced Wednesday that it signed a seven-year, $16 million outsourcing contract with CGI Group Inc.
CGI will manage the core banking system, customer relationship management, loans originations and electronic transaction switching from its Mississauga, Ont. office
Only the internal communications network will remain part of the Alliance’s in-house operation.
“We’re all relatively small organizations individually so the costs were too high to look at in-house solutions,” said Michael Wagner, the chief executive officer of the Salmon Arm Savings and Credit Union, a member of the Okanagan IT Alliance.
Consisting of seven credit unions based in British Columbia’s Okanagan valley that serve 130,000 clients, the Okanagan IT Alliance was formed two years ago to allow the individual credit unions to share costs and resources.
Rod Matlock, vice-president, financial services solutions for CGI group said from his office in Burnaby, B.C., that credit unions are starting to grow and merge with each to offer a wider spectrum of services to their clients. “The banks have become their competition,” he explained.
While a $16 million contract isn’t especially large, it has the distinction of being one of the first contracts that was extended beyond five years, according to CGI.
CGI currently provides banking and electronic transaction switching to 2,300 financial institutions in North America. Matlock said CGI is well suited to credit unions because it has a strong presence in the industry throughout North America.
The company’s 2001 acquisition of California-based CyberBranch brought credit-union specific technology into the CGI fold, including software that provides instant decisioning for all Internet loan applications in under a minute.
In 2000 CGI purchased CU Processing, a company that developed and marketed data processing programs and systems designed specifically for credit unions.
Matlock said CGI’s employee portal also provides bank employees with integrated financial information on their clients. This means employees will only need to open one application to find out their clients’ financial information.
Other CGI credit union clients includes Halifax-based League Data, with which it signed a 10-year, $80 million contract in May.
The Okanagan IT Alliance members include: Revelsoke Credit Union, Enderby and District Credit Union, Salmon Arms Saving and Credit Union, Vernon and District Credit Union, Thompson Interior Savings Credit Union, Castlegar Savings Credit Union, and Creston District Credit Union.