Insights

Fewer than half of banks said they were satisfied with their core provider, but fewer still said they were likely to switch providers when their contracts come up for renewal, according to a new survey of banks released yesterday during the American Bankers Association’s Conference for Community Bankers in Orlando. The survey found that just 47% of banks were extremely or very satisfied with their providers, down from 59% in 2020. Forty-two percent of banks were dissatisfied with their providers, with that percentage rising to 62% of banks using at least one of the three main providers.

Despite the dissatisfaction felt by many banks, only 21% said they were likely to switch providers. Those that have made the switch or are planning to do so cited the need to meet customer demands as a deciding factor. When asked the reasons for making a conversion, respondents said that outdated core technologies and a lack of support for integration were the most popular reasons, apart from cost.

As part of the survey, the ABA Core Platforms Committee defined the 17 most critical attributes for a bank’s successful relationship with its core provider. Banks and core platform providers both agreed on the importance of the 17 attributes driving bank success, but core providers overestimated their effectiveness in helping banks meet these goals. “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, committee chair and EVP and COO of Queensborough National Bank & Trust in Louisville, Georgia. The survey also found wide support for the committee, with 75% of banks saying its work has encouraged core providers to address ongoing bank concerns.

Asked what they consider the most problematic terms in their core provider contracts, nearly half of banks cited service level agreements, with a close second being fees charged for implementation with a third-party provider. Banks also cited fees charged for upgrades and the ability to access data as other problems.