Here is the paradox about credit union core systems: they areold, truly antique in computer terms, but they also seem to beimmortal in most institutions.

“People have been talking about the death of the core since atleast 1995,” said Scott Hodgins, a research director with Cornerstone Advisors inScottsdale, Ariz.

That was the moment when the antiquity of systems running ondying computer languages – COBOL for instance, which dates back tothe 1950s – came into clear focus, as Windows-based computersaccelerated their march to nearly complete domination of theworkplace.

But not in the back office of credit unions where even today,almost 20 years later, old cores – 20 to 40 years old, sometimesolder still – continue to log transactions.

“The core is the essential organs of the credit union,” saidDavid Gibbard, senior vice president at core company EPLin Birmingham, Ala.

And yet, admitted Gibbard, “Most cores are not doing what theircredit unions want.”

What credit unions want, he elaborated, is a managementinformation system – that is, computers that tell the institutionall it needs to know about its members, its lines of business, itsopportunities and more.

“That's not what most cores are today,” said Gibbard, who saidthat the opportunity for core providers is to create systems “thatlet credit unions better understand and better serve theirmembers.”

Other experts envision a revolutionary shift away from coresthat record transactions to cores that track relationships, thatis, “social cores” that let an institution see exactly where itslots in its community and in the lives of its members.

Quite probably something along that line will happen asinstitutions shift to an off-premise, so-called service bureau orhosted cores, very possibly one that serves multiple institutionssimultaneously, suggested Gibbard.

A curious fact about cores is that most provide more power thantheir institutions need but they also, paradoxically, do much lessthan their institutions need, that is, they have severelyconstrained abilities and flexibility. Shifting to a hosted andshared environment just might solve both issues, at a morefavorable price point for institutions.

But most credit unions still cling to their old cores and resistshifting to service bureaus, no matter how dazzling the possiblecomputing benefits. Frankly, said Hodgins, his advice is to stickwith an existing core – regardless of age – until it simply nolonger provides what the credit union needs.

And that usually happens only when the institution wants toextend into a wholly new service (perhaps mobile banking) or offera new line of business (business lending is a for instance of aproduct line that challenges many legacy cores, saidHodgins). Either way, until the core is broken, don't throwit out, is the advice from Cornerstone.

Core vendors, incidentally, also have few reasons to kill offaged cores. “They are cash cows,” said BradSmith, CEO of consulting firm Abound Resources in Austin,Texas. The vendors are not investing in upgrades, so the servicefees that come in manly fall straight to the bottom line, saidSmith.

That leaves neither side motivated to kill off an old core.

Also troubling is that one recent attempt to build a core fromthe ground up, Fiserv's Acumen, has seemed to stumble to a premature death, with Fiservopting to buy the aging Open Solutions Inc. DNA core and use it –with some upgrades borrowed from Acumen – as its new flagshipcore.

A reason for the lagging core development: shifts off legacycores are very few in number. There's a handful every year, nomore, and that sluggish market has not fueled substantialinvestment in developing new core architecture.

There also, increasingly, are clever strategies for prolongingcore life, mainly by moving functionality off the legacy core andinto newer computers that work side by side with thecore.

Mary Nugent, a vice president at systems modernization firmMicro Focus, said that thefirst thing her company does when it is brought in to tweak asagging core is hunt for processes to shift off the core.

“That is low-hanging fruit with little impacts on [members],”said Nugent – and of course the prime worry with any core update orconversion is that members will be inconvenienced (or worse) andthey will flee the institution.

Selective off-loading of functions that do not need to be on thecore is a generally safe strategy, said Nugent.

Hodgins said similar: “Credit unions are adding to their cores'lives by moving functions off them.” Cornerstone's numbercrunching makes that shift vivid. Some years ago, coresystems ate up half of a typical credit union's IT budget, saidHodgins, and now that number is nearer to 20%.

That is a fact about credit union computing today. The core hasceased to be the system, it now shares the stage withmultiple systems that may be every bit as important to the life ofthe institution, said Hodgins.

“The core matters less today, so long as it provides minimumfunctionality, it is doing its job,” said Hodgins.

Robert McGarvey isa longtime technology reporter and writer for Credit UnionTimes and many other national publications.