By Denise Stevens
Apple imposed strict protocols on the development of apps when the company launched the first iPhone in 2007. Every app needed to be built to Apple’s specifications. Apple’s approach was no different than that of large, traditional financial services organizations like First Data, Visa and MasterCard who locked their systems down tight in the name of security and control.
But six short years later, Google came out with a decidedly different philosophy and became the first to open its architecture to allow developers to build apps to integrate with the developers’ systems. In anticipation that developers would eventually figure out how to go around the traditional players to give consumers what they wanted, Google instead opted to open up their systems to enable integration.
That is the model behind Android. Apple quickly learned that it needed to adopt an open source philosophy. So, too, did companies like Visa, MasterCard, First Data and others that have followed suit. The open architecture model can apply to any organization that invests in software development or customization for its own use or for the benefit of its clients.
PSCU’s evolution has been similar to that of the industry. For years, the company has ably leveraged First Data’s payment products and adapted them to meet what its Member-Owner credit unions wanted. In recent years, PSCU has gone even farther, moving from primarily redistributing the products and services provided by its partners to developing its own set of fully formed web, mobile and data applications and providing open access to services and data via a robust set of APIs.
This approach to open architecture has begun to allow PSCU to develop single “stacks” of functions that can be reused across many different applications, both credit union- and consumer-facing. This will ultimately enable PSCU to deliver these services more cost effectively, by decommissioning older legacy applications and becoming much more efficient with resources. Developing in this manner also fuels dramatic increases in speed and market agility.
Being Even More Responsive
In short, open infrastructure is allowing the nation’s leading CUSO to be that much more responsive to its credit unions’ needs and add more value into the “value added reseller” proposition, which is a continual goal for PSCU. Member-Owner credit unions in turn continue to benefit from economies of scale in pricing. Further, adopting the open architecture model can yield a more capable and flexible internal architecture than might otherwise be feasible within an organization's budget.
Another secondary benefit of open architecture is establishing a reputation as an organization that understands and embraces this model, which can help attract talent and create a valuable pipeline of qualified applicants.
Increasingly, credit unions are looking to enter into partnerships with financial services providers who are not only providing a ‘best of breed’ service, but are also culturally and technically flexible, enabling access to an open architecture of services and data. In the right hands, these disparate services can then be effectively and seamlessly integrated to provide an optimal member experience that is customized to the credit union’s specific market.
Denise Stevens is responsible for product management, new product development, digital experience and innovation at PSCU. Before returning to PSCU in 2015, Denise spent two years as Executive Vice President at PSCU Member-Owner Vantage Credit Union in St. Louis. Prior to her tenure at the credit union, she spent seven years at PSCU where she ultimately operated as the Vice President of Innovation & New Product Development. Denise’s career also includes roles as Business Leader at MasterCard, Paymentech and Equifax.