Credit union consolidation has been well under way for a while,as has credit union core processing consolidation. While I have toadmit that Fiserv's recent acquisition of OSI didn't reallysurprise me, the news was disappointing.

Having worked as a CTO at several credit unions using Fiservproducts, as well as at what used to be Summit Information Systems,I do not believe market consolidation of cores is good for creditunions. Sure there are some good things that come from a Fiservacquisition. Financial stability, a nice orange logo, sales peoplewearing orange shoes, hats and maybe even smocks are a few of theperks. Ultimately, it means further lack of choice for creditunions.

• ALSO READ Fiserv Buys Open Solutions
• ALSO READ Fiserv CEO Sees Integration in Open SolutionsBuy
  
• ALSO READ Fiserv Takeover Good or Bad For CreditUnions?
• ALSO READ Fiserv'sOpen Solutions Buy Marks End of an Era

When Fiserv first starting acquiring cores, they allowed them torun independently and continue to innovate. Fiserv fit in well byproviding financial stability and access to capital. Over the past10 years, however, Fiserv tried to consolidate the cores while notcalling it consolidation. They stopped investing in some platforms,renamed others, but mainly worked to create a closed community.

I think a fully integrated Fiserv product line could be cool,but I also think it is impossible based on seven (now eight)different leadership styles, technology choices, servicephilosophies and endless other contrasts which contributed to thecreation the different cores in the first place. It reminds me ofwhen Ford or GM acquire other car companies and integrate supplychains. Suddenly everyone is surprised when customers driving aJaguar don't like their new Ford steering wheel.

I think we have to ask ourselves as an industry, what reallydrives innovation? What fosters innovation and collaboration? Whatare the forces that develop a community? What role does competitionfrom our key vendors play in helping us create new business modelsand a brighter future? What opportunities does our access toabundant capital provide? In my experience, a large conglomeratedoesn't usually support the evolution we are seeking as anindustry.

In the past, when the industry was larger and more diverse, theindividuality of brands, philosophies and products that existed andthrived as different cores serving different masters broughtinnovation, improvements and efficiency gains.

Some cores focused on great credit union technology, some ongreat service, and some on low-cost business models. Any way youlooked at it though, credit unions' cultures and philosophiestended to match the core in some way.

As our industry consolidates into a commoditized set offinancial services, are we destined to receive the samecommoditized solutions from our key technology providers? Maybe that is the way of the future for credit unions, butgiven the staggering size differences of our competitors, a“one-size-fits-all” approach seems flawed. As the old adagegoes – if all you have is a hammer, everything looks like anail.

Maybe we have to ask ourselves, what does sustainability looklike, not just for our credit unions but for our communities andour technology? On one hand, there seems to be very littleinnovation in core products, on the other hand we continue to seevital innovation occurring within new payment platforms such asDwolla, CU Wireless or within our Shared Branching platforms.

New entrants seem to emerge regularly while at the same timemore regulation and more consolidation seem to create opposingforces and challenges. As a young company we certainly face bothchallenges. Some days it seems we must create mountains ofdocumentation to demonstrate regulatory compliance, the next we areasked to bring an emerging technology to our community.

Ultimately, I think it is key for credit unions to recognize thechallenges that come with consolidation in our industry, and toembrace collaboration. As an industry we must demand bettercommunity partnership, better innovation, better collaboration, andchallenge the forces that pit consolidation against innovation andregulation against freedom.

We must also learn how to be better partners, change theequation, or approach the problem differently. Collaboration,innovation, trust, belief in the little guy is what credit unionswere built on. If we regulate and consolidate those values out ofexistence, we may just end up with more of the same.

Kirk Drakeis president/CEO of Ongoing Operations LLC inHagerstown, Md.