Around 10% of credit unions looked to upgrade their core banking systems last year, marking a significant increase from the historical percentage average of 4-5%, according to two new reports from Boston-based financial research and consulting firm Celent.
Credit unions are trending toward the cost-effectiveness and efficiency of hosted or service bureau core banking solutions as they lack the resources to run robust in-house systems, Celent said.
Contributing to the hosted solution trend is the desire among CUs to eliminate the technical responsibilities of maintaining in-house solutions. The firm also found that hosted solutions are cheaper than in-house solutions for small CUs and allow CUs of all sizes to better manage risk and more easily meet regulatory requirements.
CUs are also choosing multichannel systems that provide options such as ATM, mobile, Internet and IVR, as well as solutions with integrated functionality such as CRM and business/mortgage processing automation, Celent said.
“The core banking market for credit unions looks increasingly complex, with product sets and channel offerings becoming a crucial landscape for competing in an ever-expanding financial services industry,” Celent Senior Vice President Bart Narter said. “Credit unions are continually looking to maximize their product offerings with more efficient and flexible core systems.”