What Does The Purchase Of OSI Mean For Credit Union DP Market Share?

With the addition of Open Solutions' credit union clients, Fiserv will serve more than 2,350 credit unions with $411 billion in aggregate assets.

 
 

Fiserv, the company with the largest core processing market share for credit unions, just got a bit bigger. This week they announced the purchase of Open Solutions for $55 million plus the assumption of OSI’s debt.

With the addition of over 200 credit unions using OSI, Fiserv will now serve over 2,350 credit unions on its multitude of core processing platforms according to Callahan & Associates’ market share survey, published in the 3Q 2012 edition of Technology@CU. After the acquisition, Fiserv credit unions hold over $411 billion in assets in aggregate.

The next largest core processing company by number of clients is Fedcomp, Inc., with nearly 800 credit unions. Symitar, Harland Financial Solutions and FIS round out the top 5 in in total number of clients, although those companies’ platforms cater to much larger credit unions than Fedcomp.

Fiserv has made a significant addition to its repertoire: OSI’s credit union clients are on average the largest group serviced by core processing vendors with almost $440 million in average assets, as well as the fifth largest market share among core processing vendors for credit unions. Once it joins the Fiserv family, OSI will be their fourth largest data processing platform. 

Overall, Fiserv’s credit union clients today have an average asset size of roughly $149 million. The profile of the average OSI client is closest to Fiserv’s CUBE, Spectrum and XP2 platforms. After the merger , the average asset size for credit unions using Fiserv’s data processors will increase 17.2% to $174 million.

In comparison, the Symitar credit union client base has average assets of $402 million; FIS’ average client size is $338 million; and credit unions on Harland Financial Solution’s platforms average just over $179 million. Symitar serves the second largest asset base of over $277 billion in total assets; FIS serves more than $113 billion; and Harland has almost $74 billion. Fedcomp primarily services smaller credit unions and has only 22 credit unions over $20 million in assets. Fedcomp’s average assets size for credit unions on their platform is just over $4 million.

Looking at the performance data of credit unions across the different platforms, OSI clients outperform most of the other core platforms across a range of financial performance metrics including growth in loans, shares, operating expense control, and efficiency. Most notably, OSI credit unions grew their membership base by an average of almost 4% in 2012, more than double the rate of the average Fiserv client.

FISERV BEFORE & AFTER ACQUISITION
DATA AS OF JUNE 30, 2012
© Callahan & Associates | www.creditunions.com

  Before Merger After Merger
Market Share 30.64% 33.59%
Average Assets of CU Client $148.6M $174.2M
Total Assets of CU Clients $320.1B $411.5B


Callahan & Associates’ core processor market share survey, published in the 3Q 2012 edition of Technology@CU, contains client performance analysis on the 29 processors serving at least $500 million on total assets. For more information, please contact Callahan & Associates at (800) 446-7453. Vendors, please request to speak to Alexandra Gekas (ext. 212). Credit unions can request Tim Taylor (ext. 247) or Duncan Bowling (ext. 221).

 

 

 

 

Jan. 17, 2013


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