Big players still dominate the major vendor market, but disruptors are hiding
In a year like no other, some things stay the same – for example, the suppliers who consistently dominate the core processing market for credit unions. This year, however, the technology they provide has played an even more crucial role in meeting the new imperatives brought to the fore by the coronavirus pandemic.
The best example of this is the emergence of virtual engagement as a new standard in conversions. The process has changed on the fly, and this delivery method – once so heavily dependent on the in-person presence of a vendor’s team – could be changed forever.
As a result of these dramatic changes in the way credit unions operate and interact with their members – including the standardization of basic cloud-based delivery and highly integrated ancillary solutions – there are more opportunities than ever before. for a credit union to find a core business suited to a wide range of service providers.
Big guys still dominate, but there are choices
While the giants still dominate the core market share, there are 28 different core vendors (offering 41 different platforms) to choose from, and that’s only among the competitors serving at least $ 400 million in aggregate assets. , based on our analysis for the 2021 version of our “Supplier Market Share Guide: Credit Union Core Processors”.
Fiserv is still the market leader, with 30.8% of industry-wide credit unions, although this is a decrease of 68 basis points from the previous year. It also leads the market for total credit union assets at 35.8% (down 66 basis points year-over-year).
Symitar follows with 12% of the total market share of credit union customers, still far behind but up 52 basis points from a year ago. Symitar’s clients also tend to be larger, with subsidiary Jack Henry & Associates owning 33% of the industry’s assets, an increase of 91 basis points this year.
Symitar serves over the largest credit unions in the industry, working with the highest total (159) of credit unions over $ 1 billion in assets of all major vendors, while Fiserv owns 142 billion dollar co-ops, and they both grew their base among them. asset class over the past year.
Meanwhile, small credit unions use a much wider range of suppliers, led by FedComp, which maintains its niche as a dominant supplier for smaller credit unions, ranking second in number of credit unions under. $ 50 million in assets, just behind Fiserv. Let’s take a closer look at what’s been going on since we released last year’s Main Market Guide.
Fiserv loses the most due to the shrinking of his base; Correlation adds the most
There were 150 fewer credit unions in June 2020 – 5,425 – than there were in June 2019, and more than half of these merged or closed co-ops were Fiserv clients in the asset bands lower.
It was then that 11 of 28 vendors (again, serving at least $ 400 million in total assets) gained year-over-year customers and 17 lost customers, evidence of both ‘a global consolidation of the industry and an increase in market opportunities for small suppliers.
Namely, Corelation gained the most credit union customers year-over-year, up 14 to 94. Corelation’s market share also increased 31 basis points to 1.78% . Symitar recorded the second highest growth in customer base for credit unions, adding 10.
Meanwhile, Symitar’s Episys solution continues to be the leading single platform in terms of customers and assets, with 672 credit unions (holding 34.8% of industry assets) spread across three vendors: Member Driven Technologies (93), Synergent (65) and Symitar itself (514).
FedComp has 530 credit unions in total, all but one with less than $ 100 million in assets, and Fiserv’s large platform family is led by Portico, third overall with 346 clients.
When it comes to total assets under management (and their average size per institution), the top six are Fiserv ($ 633.5 billion, $ 389.6 million), Symitar ($ 583.6 billion, 919 million), FIS ($ 224.3 billion, $ 1.3 billion), Corelation ($ 62.1 billion, $ 660.6 million), Finastra ($ 60.4 billion, 411, $ 2 million) and CU * Answers ($ 24.1 billion, $ 137.6 million).
There are over 20 other competitors with at least $ 1 billion in total assets, competing to serve a credit union space that is shrinking in number of institutions but growing in membership, loans and shares. . Together, these suppliers and their customers continue to leverage technological advancements to deliver synergy to their operations and improved products and services to their members.
Will Hunt Industry Analyst Callahan & Associates Washington, DC