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As Central 1 winds down its digital offering, suppliers are rushing to sign new clients
What's changed?
In the previous Insight, we noted that Central 1 was winding down their forge and Member Direct digital banking platforms. In the three months since October’s announcement alternate providers have stepped up their efforts to fill credit unions’ digital needs:
What’s next?
There are over sixty credit unions still on forge or Member Direct who have not selected or publicly announced alternate providers. Central 1 has committed to supporting a smooth (and potentially multi-year) transition. Supplier risk is extremely low. However, decisions will need to be made.
Key takeaways
For credit unions, this is a pivotal moment. Decisions made now will define your digital strategy for years to come. Suppliers should see opportunities in the untapped market – 60 credit unions and $50B in assets remain unclaimed. If you need a clear plan to succeed in this competitive environment, I can provide actionable, tailored advice. Reach out today to explore your options. Who are the Top 100 choosing?
Canada's 100 largest credit unions comprise over $317B in assets and serve six million members. This is approximately 98% of the sector’s total assets (all figures Q2 2024).
Of this segment, ebankIT is the most popular digital banking vendor with an installed/announced base of 29 credit unions representing $117B in assets. Half of the assets are managed via direct relationships with ebankIT, with the other half provided via a service agreement with CGI (legacy Celero).
Second is VeriPark, with one live client and six more announced totalling $51B. Intellect Design’s Vancity win gives them $29B of assets. Rounding out the vendors is Desjardins Ontario’s AccèsD platform sourced from Desjardins Group, and FirstOntario’s Temenos. Meanwhile, eight credit unions in the Top 100 have chosen to deploy in-house digital banking platforms totaling $58B in assets. This leaves 53 credit unions on forge or Member Direct who have not publicly stated their conversion plans. Several RFP processes are known to be underway, both individually and in groups. The long tail
Beyond the Top 100 are an additional 80 or so credit unions, each less than $300M in assets. Forge and ebankIT are the most popular providers. Notably, all the small credit unions in Atlantic Canada source their forge platform via a group contract with League Data.
For small and mid-sized credit unions, transitioning to a new digital platform can feel insurmountable. Resource limitations make it harder to assess vendors or make strategic decisions. Collaboration among credit unions, centrals, and shared service providers will be key to leveling the playing field. Decisions, decisions
Digital banking is a critical technology for financial institutions. The digital layer sits between core systems and members. Digital platforms provide integration to key functionality like loan origination and payments, and generate critical reporting.
When evaluating vendors, start by asking these key questions:
Some credit unions may also choose to develop and deploy systems in-house. Self-driving institutions must balance the ability to develop customized solutions with the cost, complexity and deployment risk of going it alone. Is there room for a new entrant?
Central 1’s exit has opened the door for new providers to enter the market. In the past three months several existing providers and potential new entrants have explored the feasibility of providing an alternative. Is there a market?
The current situation is conducive to competition – with some qualifications. Over sixty financial institutions with a critical mass of $50B in assets are on the market. They could be joined by one or more credit unions currently using an in-house solution or who are unhappy with their current supplier. To succeed a new entrant must be able to demonstrate superior functionality, reduced risk and/or lower price. Potential differentiators could include:
Potential suppliers must also keep in mind that many credit unions looking for a new solution may end up merging into larger institutions with an established provider. Scale is also critical, as individual credit unions are unlikely to offer a compelling business case. Credit unions exploring options can offset this risk by going to market as a group, potentially as part of a larger infrastructure consolidation play. Current providers and planned moves, >$1B credit unions
Shown below is a list of all credit unions over $1B in assets as of Q2 2024. Institutions who have publicly announced a change in vendors are listed.
What’s next?
Change can be intimidating, but it’s also a chance to unlock new potential. Whether you’re exploring vendors, preparing for RFPs, or planning bespoke solutions, I can help your credit union stay ahead of the curve.
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Doug MacdonaldAnalysis of credit union, challenger bank and fintech competitiveness. Archives
January 2025
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