With 30 Brands of Credit Union Core Systems in the Market, Who Woulda Thunk We Needed One More?

The answer is Fiserv, and the new core product is Acumen. Unlike Henry Ford, Fiserv is not a "one-color-for-all" vendor. In fact, the company has more brands of same-type-applications than any other bank tech company. In the case of credit union core systems, Fiserv now offers 15. An astute reader might correct my count because some core systems developed more than 20 years ago, and designed for commercial banks and thrifts, have been adapted for credit unions. So some of Fiserv's earlier core systems, such as Premier, might be working today in credit unions, thus increasing the count. Be that as it may, Fiserv's announcement of a new credit union system caught me by surprise.Added to my surprise is the fact that Acumen's first customer signed only four months after the product was announced. Finally, in 25 years of observing Fiserv, I have never seen signs of frivolous spending habits with regard to development projects or acquisitions. In the case of core systems, Fiserv believes that more is better, with a total of 23 core brands for all financial institutions. Worldwide, there are 36 companies offering 73 brands of core systems. The existence of multiple core systems offered by a vendor is not a unique phenomenon. The top six core vendors all have more than one offering.

I confess to loving numbers, even more than words. Give me a situation and I'll apply numbers to it even if they aren't perfect, as the following are not. For example, following is a numbers relationship of annual revenue generated by the top core systems in the U.S. The fuzzy number is the last column - Average Revenue/Brand. None of the vendors discloses each brand's revenue, so this number is an arbitrary average. It's unlikely, for example, that Fiserv's Premier (most popular) and Acumen (newest) each generates $109 million in revenue.

Core Company Core Revenue Core Products Average Revenue/Brand FIS $3.6 billion 11 $327 million Fiserv $2.5 billion 23 $109 million Jack Henry $550 million 5 $110 million Open Solutions $340 million 5 $68 million Harland Financial $180 million 5 $36 million CSI $110 million 2 $55 million

I have heard a lot of criticism from P&L experts (a.k.a. investors) who claim that multiple core companies are destroying their bottom line because of huge support, collateral and maintenance expenses. The implication is that vendors should sunset some of their excess core systems. And to that I say, "Sunsets may offer delightful views for a time, but darkness is sure to follow." Send a banker a "dear john" letter, offering a cute sister instead, and you'll lose a partner forever. I understand the sentiments of bankers. They have their own Henry Ford statement for vendors. "You can sunset any core system you want, as long as it's not the one we're using."

Disclaimer: None of these core companies knows about this blog unless they now read it on this board. I like to do things on my own, and rarely do I ask anyone's permission to publish my works. If I made any mistakes, it's because I didn't ask the vendors first. The sources for this blog include press releases, Google feeds, "Automation in Banking," and my consulting projects. But I apologize for any errors that might exist in the Gillis Guess-O-Meter, which kicks in only when vendors do not disclose.