When selecting a core provider, there is more to consider than features and functionality. There are quantitative factors that should be considered, and these numbers will help guide a credit union's decision in the selection process. Choosing the right core for your credit union can be overwhelming, but looking at the numbers and data can help the right core platform become more obvious. When shopping for core systems, obey the numbers, and your credit union will find the right fit.
Understanding what size credit unions a provider typically serves is a good place to start when beginning to evaluate core systems. A credit union with more than a billion in assets would have completely different needs than a CU with 10 million in assets, so it’s important to consider providers who work with other CUs around your size.
Don't be fooled by a provider that flaunts a big market share. If their customer base is predominately comprised of credit unions much larger or smaller than your own, then it’s unlikely their solutions will be a good match your your needs.
Many providers have a range of platforms. Some of these platforms dominate the market, while others tend to serve as more niche solutions. When meeting with providers, be aware of the platform they’re pitching. Even if the provider as a whole has a large market share, the platform they suggest may not. Take a deeper look into how this platform does in the market, and more specifically among credit unions your size.
As of Q2 2018, there are 219 fewer credit unions, year over year, totaling 5,596 for the industry as a whole. The steady decrease in number of credit unions over the years indicates that the CU industry is a shrinking market, as many CUs are acquired through mergers, fueling growth in the big institutions. While it is good practice to look at the total client base growth, consider other metrics that indicate the health of a core processors’ clients. For example, it’s more than possible for a core data processor to have a decreasing net customer count, and still experience growth in overall market share.
There are countless factors that shape a credit union’s performance, but one not to be ignored is their core system. The core touches nearly every aspect of credit union operations, and can be a “make or break” component of a credit union's success. When choosing a core provider, consider the overall performance of their clients. Digging into areas that their credit union customers excel in, and those where they falter, can give some insight to the caliber of the core technology, and how well it supports operations.
Selecting a core provider is a lengthy process, and while emotional connections like trust and compassion will fuel decisions, the numbers are equally important. Quantitative factors, like those listed above, will help confirm the core your CU is considering is a good fit, based upon numbers that count. By obeying the numbers, your CU will avoid selecting a core that was pitched by a wonderful salesmen, but in reality, not the best solution for your credit union.