Core processing technology represents one of the most important purchasing decisions for credit unions and has core processors fighting an ongoing battle for market share. And as the number of credit unions dwindles, the core wars have grown more intense.
"It impacts every member of, and employee in, your credit union and is an enormous driver of both your member experience and operating efficiency," Brad Smith, managing director, technology solutions for the Scottsdale, Ariz.-based Cornerstone Advisors, said of core processing.
Callahan & Associates' 2016 Supplier Market Share Guide lists almost 6,300 credit union core processing clients, some 800 less than the number listed three years earlier. Fiserv and its multiple platforms hold a 32.5% market share.
The Brookfield, Wis.-based Fiserv offers the industry's broadest, deepest and most innovative range of products and services, Santo Cannone, chief product officer for Fiserv's Credit Union Solutions division, said.
"We support 13 core account processing platforms that integrate with our innovative portfolio of solutions in digital channels, payments, mobile banking and bill pay, among others," Cannone said.
Ted Bilke, president of Symitar, a division of the Monett, Mo.-based Jack Henry & Associates, said his company views the market in two tiers: Large credit unions (greater than $50 million in assets), which equal roughly 2,291 credit unions, and credit unions with less than $50 million in assets, which total about 3,925.
Symitar's Episys encompasses the largest share of credit unions with assets exceeding $50 million that are live on a single platform, at 642 (as of Dec. 31, 2015), according to Bilke.
"The system has tremendous range; it serves more than 40% of U.S. billion dollar asset credit unions while continuing to attract credit unions below the $250 million asset range," Bilke added. Symitar's CruiseNet has another 161 credit unions live.
With so many solutions available, it is critical for core processors to differentiate themselves in the marketplace.
"Client support and client satisfaction have long been a key differentiator for Symitar," Bilke said.
Preston Packer, director of sales and marketing at the Sandy, Utah-based technology provider FLEX, emphasized market share is one tool for measuring a potential partner, but other criteria should include a high-quality product and service, and client satisfaction.
"I do not believe there is a 'best' credit union system, but there is a system that is best for each credit union," he said.
FLEX offers a single system for its more than 250 credit union clients.
"FLEX does not rely on third-party products to provide core solutions," Packer noted. "Every FLEX customer enjoys the same benefits of integration and product offerings as the others, no matter the institution size."
To be a leader in the industry, you have to be true to your word, Theresa Benavidez, president of the San Diego-based core processor Corelation, stated.
"By that we mean that your software has to be stable, your promises to deliver product must be met, your software has to be fresh and you have to foster a culture that thrives on being collaborative," she said.
Read the latest on the battle of the core processors in the credit union space in the March 16, 2016 print issue of Credit Union Times.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
