January 2023 (Fairhope, Alabama): The Credit Union industry is at an inflection point. There were more than 23,000 Credit Unions in 1969, and as of this writing, fewer than 5,000 remain. Mergers and liquidations have drastically increased in recent years, severely impacting the remaining number of Credit Unions left in the nation.

What are these remnant financial institutions planning to do differently in the coming decade to preserve the industry and the ultimate ownership design that was once the driving factor to growing financial institutions?

The financial landscape is changing rapidly, especially with the rise of fintech companies, and their rapid development and deployment of innovative technology in the marketplace. Couple that with the increased regulatory pressure, the current volatile rate environment, increases in operating costs, and the competitiveness in the banking marketplace, and it has become incredibly difficult for smaller institutions to remain viable.

The effects have created the need for many smaller Credit Unions to look for merger partners. These merged institutions can sometimes offer more products and services, additional capabilities, and frequently better loan and deposit rates. Even medium to large-sized Credit Unions are looking to merge, bringing them increased scale. One of the areas worth discussing more often is the overall cost of technology these institutions use for core data processing. Without question, it certainly can be one of the highest costs in these organizations other than employee compensation and benefits.

Here are four questions for Credit Union leaders to consider in the year ahead:
1. Are you happy with the service of your current provider?
Let’s face it, service and support are critical to the success of any Credit Union. It would be best if you had verifiable SLAs and other metrics to measure your vendor’s performance to meet your needs.
2. Have you competitively bid on a change in your Core platform?
Even if you don’t change, this will be an opportunity to explore potentially lower pricing and higher service levels with your current provider.
3. Does your current provider deliver enhancements at least once a year?
If they are not updating your platforms other than regulatory updates, you need to ask why?
4. Does your provider still sell your core solution to new customers?
If they are not currently selling your core platform to new customers, you should ask why? And what are their plans for your current system?

While a Core processing conversion is not something a Credit Union wants to do, the value it could bring is undoubtedly worth exploring. The way forward for our industry is embracing partnership, networking, and collaboration, combining our strengths to make the finest and most comprehensive services and technology available to all credit unions, regardless of size.

A Partner, Not Just Another Vendor

CU*SOUTH is committed to the Credit Union movement and serving members. That is why we deliberately chose a business model that would allow us to be a partner and not just a vendor. 

For 17 years, we have invested in helping many smaller institutions stay relevant. Imagine a core with all the features needed to run a successful Credit Union built-in, plus ones you did not even know you could have, without the add-on prices charged by many other providers. Standard benefits for Credit Union members and staff include:

•  ACH early pay
•  Remote deposit capture
•  Card controls in the mobile app
•  Secure and easy e-sign
•  Online account opening
•  1-Click LOCs or credit card offers
•  Member reward points programs
•  Real-time data analytics & dashboards
•  Compliance and auditing automation, like transaction pattern tracking, and so much more.

Not only do we provide the core software, we offer critical ancillary services led by Credit Union experts; we help do the work while Credit Union staff focus on other areas of the business. Accounting, Call Center, Collections, Custom Programming, and IT management are all available in the Essential Services suite of offerings.

“As a Credit Union CEO and CUSO shareholder, I understand the importance of finding the right partnerships and investments for your Credit Union. We have enjoyed experiencing both with CU*SOUTH and seeing our Credit Union partners benefit from the CUSO’s all-in-one software systems, as well as a number of staffing support services from Collections, Accounting, and IT to data analytics, lending specialties, and much more.” -Rick Preble, President/CEO, RVA Financial Credit Union, $80m in assets

We firmly believe financial institutions with the heart to believe in and support the Credit Union industry’s mission will find success by combining talents through our member-owned CUSO. From our partnerships, we know today’s challenges are opportunities to grow a new and better way forward tomorrow. 

As part of the cuasterisk.com network with a community of over 362 Credit Union partners across 42 states, the fourth largest provider of core services, and as a 100% Credit Union-Owned CUSO, CU*SOUTH was founded in July 2006 with a mission to grow Credit Unions. 

Our goal is to be the leading source of solutions that empower our Credit Union community to be heroes for their 2.8 million members by offering our all-in-one core software system and staffing support for such areas as accounting, collections, and IT.

Discover the CU*SOUTH difference. Visit cusouth.com.

CU*SOUTH is building a collaborative, peer-to-peer community of Credit Unions
through shared development of technology and service platforms. CU*SOUTH is headquartered on the Eastern Shore of Mobile Bay, with a nationwide network of CU experts