The 3 steps for identifying potential new core providers

In our concluding article based on the Callahan &  Associates findings reported in, “It’s All About the Core,” we will go back to the very beginning of the process.  So far, we discussed what credit union executives look for in a new core provider, what their top reasons for selecting a new core were, and the most common limitations they encountered when transitioning to a new core. This week we expand upon our analysis by going back to the beginning and examining the 3 steps credit unions take when identifying potential new core providers. It’s no secret that moving your core technology is one of the biggest operational moves a credit union can make and that there are many credit union core providers competing for your attention. Where does credit union leadership begin? If you are in the consideration process for conversion, here are 3 key steps to take:

  1. Build a list of “right fit” core providers. There are a lot of core technology providers in the market, but one size definitely does not fit all. Do a little research and make a list of all the credit unions that have recently switched to a new provider. Determine their asset size, number of branches, number of members, location, etc. Find credit unions that are a lot like yours. Which core did they use before the conversion, who did they switch to and why? Look at their review process and consider expanding (or narrowing) your focus on those cores.
  2. Analyze Performance. Once you have identified cores that have recently been selected and appeal to your type of credit union, dig deeper into the data. Use call report data to evaluate the core’s performance in similar credit unions. Look at loan growth and member growth; how easy does the new core make it for new members to join. This process can be referred to as operational benchmarking. Refine your peer group by operational criteria that matters to you and filter your results in order to analyze your CU as it compares to the others.


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