I hate to be a big neg-bomb, but the utter dearth of new innovations coming out of the core players is really bringing my clients down, dude. Seriously. Fifteen years ago the whole industry was abuzz. We had OSI, EastPoint and Phoenix emerging with new architecture and an updated look/feel, and we all thought the market was about to explode with Raw Coolness. “But nooooo!!!”
So 15 or 20 years later, we have maybe one innovative product in the market, and even that is debatable. Sure, we have Acumen emerging in the credit union market with some newer technology. But despite some impressive signings, Acumen can’t finish a meaningful conversion to save its life and is getting sued along the way.Who knows how long Fiserv will tolerate that? We also have Corelation, boasting several execs and a chief developer who all used to walk the halls at Symitar, bringing a credible new product to credit unions, but it looks and feels so much like Symitar that it might be reckless to refer to Corelation as innovative.
So, why is the innovation level at our core vendors stuck on empty? Well for one thing, what many of us used to call core vendors are now in some cases really payments companies. Take a look at this table depicting segment performance for the first nine months of 2012 at our two largest vendors, FIS and Fiserv. If you wonder why we’ve lost that innovative feeling in the core groups, look at where the money is.
Payments Revenue/Financial Services Revenue 122% 107%
Payments Operating Income/Financial Services Operating Income 102% 126%
Source: SEC 10-Q filings via EDGAR Online
Looking at the most innovate products at the major vendors now, we’ll notice a pattern:
Vendor Most Innovative Product Self-Developed?
FIS Bill Pay No, acquired
Fiserv Mobiliti (mobile) or CashEdge (payments) No, acquired in either case
Harland CreditQuest (commercial LOS) No, acquired
Jack Henry Yellowhammer (risk) No, acquired
Open Solutions Core suite Yes
I submit that GonzoBankers demand the following list of realistic innovations from their core providers:
Cornerstone Advisors has the in-depth industry knowledge and the tools to ensure our clients make informed, well-documented vendor decisions.
As a result of more than 200 core and ancillary system selection and contract negotiation engagements, Cornerstone has developed a proven methodology to help banks and credit unions choose solutions that closely match their strategic technology vision.
Whether shopping, selecting, converting or negotiating, now’s the time to enlist the expert assistance of a seasoned partner to help manage your vendor relationships. Contact Cornerstone Advisors today to learn more.