For credit unions, the past year has been marked by rising interest rates, expectations of a recession that has yet to arrive, and the dramatic arrival of ChatGPT and its generative AI rivals.
The meteoric adoption of artificial intelligence underscores the impact AI is poised to have on essential processes at credit unions and nearly every other financial services provider. Core banking systems are poised to be at the center of those changes, whether that means using technology to bring member-facing chat services to a new level, super-charging the ability to anticipate shifts in loan and savings demands, or more.
Despite years of predictions that core processing will become not only commoditized across vendors but fragmented by function, that really hasn’t happened yet. A credit union’s relationship and dependence on its core technology provider is a fact of life, and the choice of who to partner with remains just as critical.
The Land Of The Giants
The big guys still dominate, as they have for years. Fiserv, for example, lost 78 basis points of market share from 2022 to 2023 but remains the market leader, claiming 1,346 processing clients or 28.1% of the credit union market.
Jack Henry and its Symitar platform, meanwhile, gained 25 basis points of market share to hold 10.8% of the market with its 517 total clients. That gives these two dominant players a combined market share of 38.9% of the credit union space by number of clients.
MARKET SHARE FOR TOP 20 CORE PROVIDERS BY NUMBER OF CREDIT UNION CLIENTS
NUMBERS REPRESENT TOTAL CREDIT UNION CLIENTS | PERCENTAGES REPRESENT TOTAL MARKET SHARE
© Callahan & Associates | CreditUnions.com
Symitar maintains a firm grip on its spot as the largest provider of core services to the largest credit unions, claiming 193 of them, a gain of eight from last year compared with 150 for Fiserv, down eight from last year.
Fiserv also continues to lead the market in clients in all other asset bands. It gets close, however, in the $250 million to $1 billion-asset segment, where Jack Henry and Symitar hold a close second at 205 credit union clients to Fiserv’s 214.
Monumental Momentum
Whereas Fiserv maintained its position as the largest core processing supplier, Corelation made the largest gains. It added 24 new clients to its KeyStone platform and now has 169 credit unions running on its system. Its market share grew 60 basis points last year to reach 3.5%.
Overall, 10 of the 28 core platforms serving a client base with at least $400 million in total assets gained clients, 10 lost clients, and two held their client number steady.
The More Things Stay The Same, The More They Change
Core processing platforms remain at the heart of the business, serving as a connector for transactions and technology alike. That role has only become more important as consumer demand for seamless service increases.
It’s worth noting technology also continues to be most credit unions’ largest expense after people and physical space.
Assessing core relationships and service is an ongoing process, and switching or renewing takes considerable time, effort, and a big financial and operational commitment. Callahan & Associates is here to help with a road map for 2024. Its annual Market Share Guide: Credit Union Core Processors tells leaders who’s who and what’s up among providers of the most critical of technology infrastructure. Download it today in the Callahan client portal.
Not a client? Learn how to gain access to Callahan’s award-winning publications, intuitive benchmarking tools, collaborative networks, and more.
