From Wish List to Reality

JMFA

Using contract negotiation savings to transform your financial institution

 By: Kelly Flynn, National Director 

In today’s financial landscape of big banks and online banks, credit unions and community banks must be more innovative than ever before to remain competitive. However, “innovation” usually requires funds. If your financial institution doesn’t have any money left in its budget to add services, hire staff or support new marketing initiatives (which most credit unions plan to do in 2020), how can you keep up with the competition?

The answer may be to “find” the money you need to attain the items on your wish list, and it’s easier than you may think. It could be sitting right there in your vendor contracts, just waiting for you to set it free. With the help of a third-party contract negotiation expert, you can get the best deal from existing or new vendors—with the added bonus of not having to take on the lengthy negotiation process yourself.

So, what would you do with some extra money in your budget? You could use it to compete in the digital wallet space by upgrading to tokenization. Or, you could start issuing instant debit and credit cards to give account holders immediate access to their new accounts. Maybe a new hire or some extra marketing dollars could go a long way. Or, perhaps you need to replace expensive equipment, like ATM machines, or upgrade them to make sure they’re Windows 10-ready in 2020. If your wish list seems never-ending, it’s time to start looking for a way to make things happen.

Real Savings, Real Impact

If this all seems a bit pie-in-the-sky for your financial institution, I’m here to tell you that JMFA finds money for our clients every day. I’d estimate about half of the banks and credit unions out there partner with a third-party contract negotiator or a lawyer (or both) to review their vendor agreements. So, if you’re not doing this already, you can be sure some of your competitors are.

At JMFA, we have success story upon success story of financial institutions that have worked with us to uncover significant savings—some upwards of $1 million over the course of their contract terms. With that newfound money, these financial institutions were able to dive into their wish lists headfirst and implement programs and services they’d been searching for a way to fund. Take a look at what a few of our clients have done with their very real savings from contract negotiations.

CORNERSTONE COMMUNITY FEDERAL CREDIT UNION
Contracts Renegotiated: Credit & Debit Card Processing, Bill Pay
Outcome: With more than half a million dollars in savings each year recouped, Cornerstone CFCU began implementing services it had put on the backburner, including:

  • Tokenization for Apple Pay, Google Pay and Samsung Pay
  • Texting notifications for debit cards
  • Identity verification and fraud detection for credit cards, and member access to their credit scores

President and COO Mary Scheib said, “We wanted to give members what they want, and keep up with those wants. If not for the savings from JMFA Contract Optimizer, these services may have been pushed to the side.” Read the full case study >

 HEARTLAND TRI-STATE BANK

Contracts Renegotiated: Core Processing (including two core conversions for recently acquired banks), Debit Card Processing, Item Processing, Bill Pay, Fees for Card Plastics
Outcome: 
JMFA negotiated an annual savings of $83,461 for the bank, as well as $250,000 in signing bonuses. This more than covered the impending $150,000 cost to convert the two banks Heartland Tri-State had recently acquired.

CEO Shan Hanes said, “I’ve already addressed with the Board that this was the smartest decision we could have made. It’s the only way to do it. As a banker, you don’t have the time to go into all the details involved.” Read the full case study >

FRANKLIN FIRST CREDIT UNION
Contracts Renegotiated: Core Data Processing, Internet Banking
Outcome: 
Along with renegotiating more advantageous contract terms, JMFA also helped the credit union obtain $44,000 in annual savings (and an additional year of retroactive savings), which Franklin First will use to:

  • Introduce a mobile banking app 
  • Add online banking enhancements to better serve tech-savvy Millennials 

CEO Michelle Dwyer said, “To have that extra money going forward is great, because we can add products and services to expand the credit union.” Read the full case study > 

CROSS VALLEY FEDERAL CREDIT UNION
Contracts Renegotiated: 
Card Brand Agreement (VISA/MasterCard)

Outcome: JMFA gathered proposals from the credit union’s existing vendor plus other potential vendors. Selecting a new vendor gave the credit union a signing bonus and increased their interchange fee (which would cover the card conversion) PLUS:

  • Added two new interactive ATMs, one of which allowed the credit union to maintain a strategic presence in a community where a branch had closed.