The Goldilocks Principle: Finding the Right Core

In the credit union industry, choosing the right core processor is a bit like Goldilocks finding the perfect porridge—not too hot, not too cold, but just right.

Welcome to the Goldilocks Principle of Core Processors for Credit Unions. In this blog post, we'll explore how this timeless concept from the fairy tale realm applies to the tech-driven decisions faced by credit unions today. Just as Goldilocks sought balance in her choices, credit unions are on the quest for a core processor that fits their needs like a well-tailored chair.

What is the Goldilocks Principle?

The Goldilocks Principle, also known as the "just right" principle, is a concept derived from the fairy tale "Goldilocks and the Three Bears." In the story, Goldilocks encounters three bowls of porridge, three chairs, and three beds. She chooses the one that is neither too hot nor too cold, neither too big nor too small, but just right.

Applied more broadly, the Goldilocks Principle suggests finding the optimal middle ground or balance between extremes. It's about seeking the perfect fit or the ideal condition that is neither too much nor too little but is just right for a particular context or purpose. This principle is often used in various fields, including science, economics, and design, to emphasize the importance of finding a harmonious and well-suited middle ground.



How does it apply to core?

The Goldilocks Principle is a key consideration when credit unions choose a core processor. It's like finding the right-sized chair in the story—each credit union has its unique needs, and a one-size-fits-all solution won't cut it.


Too Big

If the core processor is too complex, loaded with features your credit union doesn't need, it can be overwhelming and inefficient. What a core processor is "too big," it means that it is too complicated or overwhelming for your credit union. Maybe it offers way too many integrations that your credit union does not need. Maybe its complexity takes away from your credit union's efficiency. 

Another issue with core processors that are "too big" is that your credit union is paying top dollar while underutilizing the technology. Don't pay for what you don't need. 


Too Small

A basic processor might lack essential functionalities, leaving your credit union scrambling to meet operational requirements. When a core processor is "too small" your credit union has to spend lots of extra time coordinating third party relationships by yourself instead of automatically getting them along with the core. 

This issue leads to inefficiencies and wasted time. Your credit union might need multiple people dedicated to interacting with third party relationships. 

A core that is "too small" doesn't give you everything your credit union needs to succeed on the technology side. With a core that is "too small", your credit union has to worry about keeping up with technology and feeling like you are always behind. 


Just Right

When a core processor is "just right," your credit union experiencing efficiency and growth while being competitive. When a core processor fits your credit union's needs perfectly, your credit union deals with less moving parts, because a "just right" core is a one-stop shop for you. Save time and money by perfectly utilizing its features while minimizing the demand on your time from third party vendors. 

A "just right" core offers all the features to help you stay competitive. This might be...

  • Mobile banking app
  • FedNow
  • Automated loan decisioning
  • Digital Applications
  • eSignatures

While offering all the features that help your credit union operate efficiently. These features might include...

  • Fraud prevention
  • Accounting
  • Document management 
  • Off-site data backup
  • Data encryption


What Does My Credit Union Need?

Small Credit Unions

For small credit unions, simplicity and cost-effectiveness are paramount. A core processor tailored to their size should offer essential functionalities like member management, transaction processing, and basic reporting. It should be user-friendly to accommodate a potentially smaller staff without the need for extensive training. Scalability is also crucial—something that can grow with the credit union as it expands.

Another integral part of a core for a smaller credit union is the support from fintech partner. Being a more local, hands-on credit union needs more consistent and personalized support from your core company. Finding the perfect core not only includes the technology but the partnership. 


Medium Credit Unions

Medium-sized credit unions need a bit more firepower in their core processors. They should look for solutions that go beyond the basics, incorporating features like automated workflows, more advanced reporting and analytics, and improved member engagement tools. The system should be scalable to accommodate potential growth and agile enough to adapt to evolving industry trends.


Large Credit Unions

Large credit unions operate on a different scale, requiring robust, comprehensive core processors. These systems should handle complex operations seamlessly, offering advanced analytics, integrated risk management, and support for a diverse range of financial products. Customization and flexibility become crucial, allowing large credit unions to tailor the system to their specific needs. Integration capabilities with other systems and third-party services are also vital for efficiency.


Find the Right Core for Your Needs

To discover the ideal core processor for your credit union, it's crucial to consider your unique needs. This includes assessing factors such as asset size, the number of members, and the size of your team.

At FLEX, we recognize the significance of a core processor that aligns with your credit union's objectives for growth and stability. That's precisely why we've developed an eGuide specifically designed to assist you in finding the perfect core processor solution.

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