From the three Callahan infographics (view here), the overriding take away is competition. Competition in any market is healthy, especially for customers where costs are always in play. However, in vertical markets such as credit union core providers, more than just price competition abounds. Think about it: We’re talking about systems that are designed to do the same thing, so how does one core provider create product differentiation from another?
- Size – Big companies like to talk about their ‘bigness’, whether they're talking about insurance or oil. Have you purchased State Farm Insurance because they are the largest? Do you fill your gas tank only with Exxon gasoline because they are the largest oil and gas company you know? My guess is that you have done your homework and you pay insurance premiums to the company that best matches your lifestyle and wallet... same as filling your gas tank. When considering credit union core processing systems, why should it be any different? The size of the company should only matter if their product set meets your credit union’s needs. In credit union core processing systems, the tail should not wag the dog. One size does NOT fit all.
- Technology – Consumer products are a great example of product differentiation through technology. Do you own an iPhone or Android smartphone? Whichever you own, it is because it meets your personal preferences, such as screen size, music collection, camera, processing power, app selection, etc. Credit union core systems, again, are no different. Some excel at interfacing 3rd party solutions, others excel at total system integration. The question is never "which system has the best technology", but rather, "which system has the technology that meets your credit union's needs and objectives?" After all, you wouldn’t buy an iPhone to leverage the Google cloud.
- Loyalty – Exceptional customer service is the best way to build brand loyalty. Credit unions know this better than any business. Price is one factor that may attract customers, but how organizations retain those customer goes far beyond price. Recent surveys have shown that just because a company is large, it doesn’t mean they offer fantastic customer service. Likewise, the same surveys have shown that technology by itself cannot keep customers happy. Loyal customers (those who stay with a core processing system for many years) do so because their credit union core providers have demonstrated loyalty to them. They answer the phone, they call back when needed, and they engage the customer base in product development. No credit union core processor is perfect... but perfect effort should be expected.
Comparing the infographics together you begin to see some interesting trends. Most obvious is there are only four credit union core processors which are represented in each of the three graphs. If you follow credit union industry publications, three of the four credit union core processing systems listed are probably expected. The fourth? FLEX.