What are they using? Just about anything and everything. Among credit unions smaller than $250 million, Utah-based Computer Marketing Corp. (CMC/FLEX) has 251 customers. CU*Answers has 154. EPL has 70. FIS has 308 (mainly on Mercury, but with 10 on Director and one on Miser). Corelation, the new kid on the block with a purpose-built core that is just a few years old, has seven customers in this grouping, according to Callahan.

And there literally are dozens more providers, some with just a couple of customers, some with hundreds, including FedComp, a Virginia-based specialist in the smallest credit unions, with 770 customers, and Sharetec Systems of Lino Lakes, Minn., with 270.

In the group of 766 credit unions with assets over $250 million, FLEX has four, CU*Answers has seven, Harland has 67 (mainly on UltraData with a few on the bank- and business services-oriented PhoenixEFE), and EPL has three. Other, lesser-known providers also figure into this mix.

The big question is, do the institutions with cores provided by vendors other than Fiserv and Symitar feel they are getting value for money? Do they have the technology they need to grow and to satisfy an ever more demanding regulator?

The market leaders definitely are losing credit union customers. Maybe not a lot. But there is steady erosion. “We get 10 to 12 conversions every year,” said Randy Karnes, CEO of CU*Answers, a Grand Rapids, Mich.-based CUSO. “We have lost only one client in the 18 years I have been here.” He noted that CU*Answers has lost customers that were involved in mergers. He did not quantify how many. “Conversion keeps getting easier to do. The process is well documented.”

Market leaders, said multiple sources, like to sell what they called a myth of how difficult and problematic conversions are. That is one way to keep customers. But, apparently, Karnes is right. A well-planned conversion generally is seamless and that means credit unions have one less reason not to look at alternatives.

“What's changing today is the perspective of the [credit union] customer. They are asking if the vendor's business model correlates with theirs,” said Karnes.

Money talks and money is why many credit unions are undergoing core conversions. Harry Montanez, CEO of Rancho Dominguez-based Schools Federal Credit Union near Los Angeles, a $115 million institution, said that converting from Harland's UltraData to Computer Marketing Corp.'s Flex core saved his credit union about $10,000 monthly in fees.

Montanez added that despite lower costs, there was no drop in functionality: “Flex is up to date. We have mobile banking, online banking, the services our members want.”

Donald Sarich, CEO of ProFinance FCU in Merrillville, Ind., a $15 million institution, said his credit union switched from a Fiserv core to one from EPL, a credit union-owned core provider based in Birmingham, Ala., that serves around 73 institutions, by Callahan's tally.

“We are saving 50% against what we had been paying Fiserv,” said Sarich.

The EPL core also automates functions that ProFinance formerly had to do by hand and, said Sarich, it has the muscle to power the credit union “even if we grow to $50 million, which we hope to. It can grow with us.”

At Wings Financial Credit Union, a $3,8 billion institution in Apple Valley, Minn., Chief Information Officer David Mason said the credit union converted off a Fiserv core in 2006, moving to FIS' Miser, a core with a minimal credit union presence (19 institutions, by Callahan's count), but with a deeper penetration in banking. “Miser gives us room to grow, that was an attraction for us,” said Mason, who indicated Wings had also looked at Symitar when it made its choice.

Mason, who said that as the institution had grown, it had stretched the abilities of the DataSafe core it had been running. “Miser fits us very well. It lets us run very efficiently,” said Mason.

At the $215 million Cabrillo Credit Union in San Diego, the core is Corelation's KeyStone and Cabrillo was “the first to sign onto Corelation and the second to actually convert,” said Chief Technology Officer Frankie Duenas. The conversion occurred in November 2011.

Duenas indicated the institution had been on San Diego-based Symitar. “We were in fact the first to adopt that core, back in 1984.” And as time went on, there just was more credit union staff wanted to do that just seemed very difficult on the older platform. “The Symitar core is account based. Corelation is member based,” said Duenas. “It's just much more efficient.”

Duenas stressed that “no conversion is easy and this one wasn't,” but he also said the conversion was made easier when all of Cabrillo's main vendors–for IVR, online banking, bill pay, and so forth – agreed to write code that allowed for integration into Corelation. “We did not have to change a single vendor,” said Duenas. As for costs, Duenas estimated that “we are paying Corelation half what we were paying Symitar in monthly service fees.”

“The only hesitation,” said Duenas, in signing with Corelation was concern about the stability of the young company. But, said Duenas, Cabrillo's CFO's numbers put break even on the system as seven years

Then, too, in a worst case scenario Cabrillo has an agreement where it would get access to the source code so even were Corelation to vanish, “we could hire programmers and get what we need doing done. We have no real worries about Corelation's stability,” said Duenas.

As for Symitar, said Duenas, “they did not even make a last-save effort. We were surprised. Mainly they just said goodbye.

Next Step
READ part two of this article in next week's issue.