Few banks satisfied with core providers

Fewer than half of banks are satisfied with their core platform providers, but most still don’t plan to switch to a different provider, according to a recent American Bankers Association survey. 

The 47 percent of banks that reported being “extremely or very satisfied with their core providers” is a 12-point drop from the 59 percent who said the same just three years ago, according to the survey released last week during the ABA’s annual Conference for Community Bankers in Orlando, Fla. Forty-two percent of banks were dissatisfied with their providers, with that rate increasing to 62 percent among those that use at least one of the three main banking core providers. Still, only 21 percent said they are likely to switch to another option.

 “Those that have made the switch or are planning to do so cited the need to meet customer demands as a deciding factor,” the ABA said. “When asked the reasons for making a conversion, respondents said that outdated core technologies and a lack of support for integration were the most popular reasons, apart from cost.” 

Banks and core platform providers reportedly identified the same characteristics that best exemplify a successful relationship between a bank and core provider. “Core providers systematically overestimate their effectiveness at delivering those same attributes,” the ABA said. “Despite this ‘effectiveness gap’ and widespread dissatisfaction, few bank leaders plan to switch core providers at their next renewal.” 

Nearly half of banks said service level agreements are the most problematic term in their core provider contract, with a close second being fees charged for implementation with a third-party provider. Other concerns included fees charged for upgrades and the ability to access data.

“The survey suggests core providers have an opportunity to bridge the gap between bank evaluations of their technology solutions and customer service and their own performance assessments,” said Kimberly Kirk, ABA Core Platforms Committee chair and executive vice president and chief operating officer of Louisville, Ga.-based Queensborough National Bank & Trust.