The emergence of self-service channels, such as the web andmobile banking, as well as transformative technologies like bigdata, electronic payments and remote deposit, have led the evolution of coreprocessing since 1990.

One essential element of the progression, particularly forcredit unions, was a shift from closed core systems to openarchitectures.

Open architecture core banking systems give credit unions theability to keep pace with rapid technological changes and incorporate best-of-breed functions across the branch, online,mobile and ATM channels.

Today's core processing systems must also have the ability toservice all channels 24/7 and seamlessly connect to a wide varietyof self-service solutions, as well as to more advanced personal andbusiness banking management systems.

“One of the key aspects of this change is the degree to whichcore processing architectures have become more open,” Keith Riddle,senior vice president, chief product management officer at theColumbus, Ohio-based, $3.7 billion Corporate One Federal CreditUnion.

Theresa Benavidez, president of the San Diego-based coreprocessor Corelation, noted, “An open architecture allows creditunions to implement just about any financial services technologyits membership demands, which opens the door to nearly anytechnology available.”

The movement to open core systems has been significant,suggested Riddle, given the pressure on the credit unions tocompete with the larger financial services, very powerfulnon-financial entities and various verticals.

“Back in the day, the core processor was isolated and thirdparties didn't talk to it,” William T. Wittig, vice president/CFOfor the $205 million, Canton, Ohio-based CSE Federal Credit Union,commented. “Now everything is real-time and it all needs tointegrate with the core.”

Credit unions also used to take what the vendor provided. SantoCannone, chief product officer for the Brookfield, Wis.-basedFiserv's Credit Union Solutions division, explained, “If creditunions wanted to customize a function, techs went into the sourcecode and changed it, and not many folks did that.” Now, softwaredevelopment kits allow for the creation of additional products.

Application programming interfaces now permit credit unions ofall sizes to seek best-of-breed solutions, which allows them todifferentiate themselves in the marketplace and grow their memberbases, Riddle added.

Learn more about core system changes that have taken placein the past 25 years in the Dec. 16, 2015 print issue of CreditUnion Times.