The Core Of What We Do

Annual core processing market share guide raises questions. Answering them helps improve the process.

We have just released our 2015 Market Share Guide to Credit Union Core Processors. Just as it has in previous years, our conclusions about market share riled some providers.

In one case, we did mistakenly state how many credit union clients CompuSource has. It’s 337 and we’ve corrected that figure in multiple data tables and across the multiple ways we deliver this much-anticipated guide each year.

In another case, a major global vendor took issue with how we calculated client numbers for several very small providers. And that got me thinking.

We understand that selling core processing systems is the heart of the business model for each of these companies. Ours is providing the most accurate information to credit unions that we can, in this case when they decide on their core technology providers.

We’ve honed our information gathering and analysis techniques over the years, and we’ve expanded that to include talking to credit unions themselves and sharing their actionable advice. What their peers say matters. That speaks to the core of everything we do at Callahan.

As for core processing selections, our annual technology survey shows that very few credit union executives care about market share. That helps explain why small operations can thrive against competition many times larger.

What credit unions care about most are service accessibility with the vendor and seamless experiences for their members, and how much it all costs. Bleeding-edge technology? Market share? Not in the top three.

Choosing a core is a very important decision. I think I should explain how we gather our data for the core guide. We get client lists from the processors themselves with varying levels of cooperation, I should say and then verify independently as much as we can, including contacting hundreds of credit unions themselves, poring over 5300 Call Reports, and monitoring vendor and credit union press announcements. Then we interpret it.

There’s more, but the point is that this is an inexact science. Conversion cycles complicate the issue, plus there are multiple business arrangements among core providers: service bureaus independent of the core provider that re-sell that platform is just one example. How much they customize the platform further complicates that picture.

That annual kerfuffle over our core processing guide is a good thing. Despite the conventional wisdom that says the opposite, it speaks to how there’s still lively competition in that space, and competition is a good thing.

Meanwhile, the questions each stakeholder raise provides us the opportunity to examine how we arrived at our conclusions and how we can improve.

Just as core processors take seriously their role as a provider of essential technology, we take seriously our role as a trusted provider of accurate, actionable information.

Please don’t hesitate to contact me at alix@callahan.comor at (202) 223-3920 if you have any suggestions on how we can serve you better.

December 5, 2014

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