A Dissection Of The Core Processing Marketplace

Choosing the right core processor is critical to the success of credit unions large and small, whether they choose a single provider for all their processing and delivery needs, or select multiple vendors to fit different needs.

And just as there’s a plethora of providers, there are multiple options to choose from among the playing field of core providers themselves. The core system is typically the credit union’s largest expenditure behind only people, and it’s important to play the field. 

Here are three best practices in that regard:

1. Analyze core processors that have clients similar to your credit union; check for gains made in relevant performance categories.
2. Reach out to peers using a core in which you are interested to solicit an unbiased testimonial of the user experience.
3. Develop core conversion guidelines, vendor management policies, and vendor risk-rating worksheets to make a smart decision and help ensure a smooth transition.

There’s been significant consolidation in the core processor space over the years, but there are still multiple choices. In fact, there are 29 different core processors offering 43 different platforms — and that’s just among competitors serving at least $400 million in aggregated assets.

That said, there are clear leaders in the core provider marketplace. Fiserv and Symitar had a combined market share of 43.0% as of mid-2018. Fiserv alone served 31.7% of the credit union industry.

With 131 clients of more than $1 billion in assets running on the Episys solution, Symitar has the edge in large credit unions. Across the industry, Episys is the most commonly used platform. It’s 655 credit union total includes credit unions using third-party Symitar providers Member Driven Technologies (90) and Synergent (65).