The Relationship Between Credit Union Size And Core Conversion Frequency

One asset-based peer group is 2.5 times more likely to convert core processors than other peer groups. Which one is it?

There appears to be inertia within the credit union industry in regard to undertaking a core processing conversion.

The time investment required to select a core processor and complete a conversion makes it unlikely a credit union will embark on the endeavor very often. The task is so daunting that even when necessary, a credit union might put it off.

Callahan’s 2017 Supplier Market Share Guide: Credit Union Core Processors is a helpful guide for leaders who want to understand the performance and strengths of players in the corespace. Order your copy today.

From 2014 to 2016, approximately 10% of credit unions converted their core, according to data from Callahan & Associates. Interestingly, there appears to be a relationship between the conversion rate and credit union asset size.

Credit unions with $100 million to $250 million in assets were 2.5 times more likely to convert than any other group. Credit unions in this range account for approximately 12% of all credit unions, yet they represented 43% of all credit union core conversionsduring the three-year timeframe Callahan studied.

CREDIT UNION CONVERSIONS BY ASSET CLASS
FOR U.S. CREDIT UNIONS | DATA AS OF 09.30.16
Callahan & Associates |www.creditunions.com

Source:Peer-to-Peer Analyticsby Callahan & Associates

One explanation for the jump in core conversion activity could lie in the increasing operational complexity and expanded product offerings inherent to credit unions in this asset class. Once a credit union hits the $125 million threshold, it is more likelyto be planning to add members and service offerings in the coming years, and increased service offerings typically necessitate a more powerful core processor.

Is It Time For A Core Conversion?

It’s important to know which core processorsare making a difference for credit unions in your market and asset range or with similar business models. Callahan offers this, conversion best practices, and more to help you make your big decision.

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