Since the early days of computer-enabled automation, the accountprocessing core has interacted with integrated systems, serving asa database-driven single source of truth for all transactionrecords. Historically, the combined capabilities of the accountprocessing core and integrated systems were singly referred to asthe core, and, as more functions became automated, they too wereadded to the core.

The plus side of this approach was that the credit union onlyhad to purchase the core, and most of what was needed to run thecredit union was included.

But, the physics of technology began to have an effect. Assystems become more capable, they also become more complex and morecostly to create, acquire and maintain.

The concepts of modularization came into play as a way toaddress these pain points. A “service oriented architecture,” orSOA, in which complex systems are organized into discrete,interoperable components, can mitigate the challenges of highlycapable and complex systems by allowing the parts to operateindependently and communicate with each other in a standardizedway.

For credit unions, this concept became very visible as onlinebanking became a market requirement. Types of online bankingsoftware were developed differently than traditional cores were, sothey were created as distinct modules. There are many examples ofmodules existing today that interact with the core, but areindependent of the core.

Today, modular solutions are the mainstay of the credit uniontechnology landscape. Most cores offer basic functionality for themajority of credit union lines of business – but this functionalitymay not meet all the specific needs of an individual creditunion.

For this reason, the requirements for what is “in the core” aremoving quickly back to the original definition. The core todayfocuses on the paramount requirements of integrity, security andregulatory compliance for all transaction data. Additionalcapabilities are increasingly delivered by modules that resideoutside the core itself.

The industry's migration to this modular approach has developeda new type of value proposition – that of integration.

In many solutions, integration is what drives the valuedifference between “best of suite,” where all the modules are partof a single product family, and “best of breed,” where modules arepulled from multiple product families. Because best-of-suiteproducts are all aligned to a single approach, methodology, andlook and feel, they typically enable tighter integration andfacilitate more seamless interactions. “Best-of-breed” products canbe independently advantageous, but because the credit union has totake on the responsibility of the integration of the modules, theremay be added costs or a material impact on the IT team to own andmaintain those integrations.

Given the many things we buy today, we shop not only for thetechnology itself, but for the ecosystem of modules that surroundsit – such as app stores and cloud services for computing and mobiledevices. Credit unions are in the same position and the analysis ofany core needs to include the complete ecosystem of modules,support, integration options, extensibility and total cost ofownership to really understand the potential return oninvestment.

As the core settles back into its original mission as thesecure, reliable and predictable source of transaction truth, theecosystem of modules that provides the functions credit unionemployees and members interact with daily has become just asimportant as the core itself.

And, the value of the integration of those modules with thecore, and with each other, is becoming the key differentiator forcredit union performance and member satisfaction.

Ryon Packer is SVP, enterprise product strategy, creditunion solutions for Fiserv. He can be reachedat 469-287-3600 or [email protected].