Infrastructure is certainly central to how a credit union deploys its system. And when it comes to choosing core systems, credit unions now have many options. Do they stay with their current system or move to a new one? Do they house it on its premises or utilize SaaS (Software as a Service) and run it over a cloud?

For credit unions running their core systems in licensed versions in their own shops, VMware allows them to simplify their infrastructures. With VMware, a credit union could run multiple operations on a single piece of hardware by virtualizing the hardware.

However, in-house processing seems to be taking place less often at credit unions.

"We are seeing more credit unions beginning to realize that running it in their own shop is not the advantage it used to be," Cannone said. "You get the same product whether you get it at your place or my place." In addition, many credit unions want to do less core system support and focus more attention on supporting their core business. "I need to understand what is happening with my members; I don't need to understand the infrastructure," Cannone remarked.

It's also easier for core vendors to keep track of security: "Credit unions that outsource their core systems benefit from the provider's security resources and scalable security infrastructure investment," Mike Urban, director of financial crime risk management solutions at Fiserv, suggested.

Another critical issue credit unions face is whether to utilize a core system's features, functions and add-ons or add other third-party products onto the system. These add-ons may include suites and/or products for data analytics, fraud and risk management, document management, card services and payments.

Credit unions face an interesting dilemma, Cannone suggested. "Do I go best-of-suite and get everything from one vendor, and minimize the number of vendors I need to manage?" he asked. "Or do I go best-of-breed, no matter how many vendors I have to manage?"

The $1 billion Columbia Credit Union in Vancouver, Wash. said it plans to use DNA from Fiserv to enhance its view of member relationships. The credit union recently sought a new core system to simplify product development, increase the scope of possible third-party solution providers, and enhance member experience. Fiserv's DNA serves both banks and credit unions, and the vendor also offers Credit Union Platforms, which encompass in-house and outsourced account processing solutions.

"DNA will bring our full range of services together onto a single platform for increased efficiency and a comprehensive view of member needs," said Steve Kenny, president/CEO of Columbia Credit Union. "The ability to interface with progressive third-party solutions is sure to escalate our time to market and support our omnichannel delivery system strategy. Plus, best-in-class commercial capabilities will help us expand our service to the community."

Because of rate pressure, regulatory expenses, and net interest margin compression, credit unions must have some understanding of member relationship profitability, Cannone explained, adding that if an organization looks at efficiency ratio, it should see two elements – revenue and expense.

While most credit unions have tightened their budgets, they must generate more revenue to improve efficiency. That means offering more services that benefit members and the credit union, and according to Cannone, is where cross-channel analytics come in.

"An increasing number of members view the credit union relationship through the mobile channel, and we need to understand who is using that channel and what types of things they are doing," he emphasized.

A new Fiserv white paper, "The Rise of the Mobivore: Serving the Mobile-Only User," reveals serving the small but growing number of mobile-only users requires a different perspective on mobile banking functionality. According to Fiserv estimates, mobile-only users comprise about 15% of a typical financial institution's mobile banking user base. The segment is small but growing, and comprises an integral part of the mobile banking user population. In addition, while mobile-only users tend to be younger, they cross generations and socioeconomic segments.

These users present a unique challenge to financial institutions, Fiserv said, because their needs are quite different from the typical mobile banking user's. Plus, since they only use the mobile channel, they are not concerned about more traditional channel experiences.

"Credit unions have a hard time getting millennials to understand the value of a credit union," Cannone said. "Now you have competition from non-traditional payment options like Venmo, an app that enables anyone with a mobile device to send and receive payments via text message. That is the challenge we have as a community to solve – how we make credit unions relevant in a very real way when an app like that exists."

Cannone added some credit unions are unaware of their current system's full capabilities and should enlist help to give their system a thorough review. He said some systems boast new functionality that credit unions are not taking advantage of, and that sharing can help strengthen a credit union's knowledge of its core system.

"Those that participate in user groups or user communities really do themselves a service," Cannone said.

He concluded that different credit unions solve problems in different ways when it comes to core systems.

"It's great when they have an opportunity to work together and learn from each other, and we as a supplier learn from them as well," he said. "It's not a technology component; it's an important component of technology."