Only 47% of Banks Are Satisfied with Core Provider, Revealing ‘Effectiveness Gap’ Between Solutions and Expectations

Banking and Finance 2023 Magazine images
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A new American Bankers Association survey of banks released at ABA’s 2023 Conference for Community Bankers finds that just under half (47%) are “extremely” or “very satisfied” with their core processor, the critical outside vendors that typically provide the technology backbone behind a bank’s day-to-day operations.

ABA’s Core Platforms Survey shows that 42% of banks are “dissatisfied” with their core processor, and satisfaction rates are higher for banks using cores outside of the three major providers, with 62% of those banks saying they are “extremely” or “somewhat satisfied.” Despite many banks’ apparent dissatisfaction, only 21% of those surveyed say they are “likely” to switch core providers the next time their contract is up for renewal.

The national survey, conducted in October 2022 at the direction of ABA’s banker-led Core Platforms Committee, also included responses from core providers for the first time. The survey reveals a clear perception gap between banks and core providers on how well core processor solutions are helping banks succeed.

“The relationship banks have with their core providers directly impacts their ability to implement the modern, innovative tools they need to compete in today’s marketplace,” said ABA President and CEO Rob Nichols. “These survey results show that there is still plenty of room for improvement in the bank-core relationship, and ABA remains committed to helping make that happen.”

As part of the survey, the ABA Core Platforms Committee defined 17 most critical attributes for a bank’s successful relationship with their core provider covering six areas, including data, APIs, technology, bank support, products and solutions, and pricing. According to the survey, banks and core platform providers both agree on the importance of the 17 attributes driving bank success, but core providers overestimate their effectiveness in helping banks meet those goals. The average importance scores assigned to each attribute by banks and core providers differed by only 0.11 points on a five-point scale, reflecting tight alignment between them. However, core providers scored their own effectiveness a full 1.67 points higher than banks on the same scale, creating the “effectiveness gap” that sits at the center of banks’ frustrations with core providers.

“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 EVP/chief operations officer of Queensborough National Bank & Trust in Louisville, GA. “Hopefully this survey can highlight specific areas where the cores can proactively engage with their bank customers.”

Under Nichols’ leadership, ABA formed the Core Platforms Committee in December 2018. Since that time, the banker-led group has identified areas of concern and specific actions that can strengthen the relationship between banks and core providers so banks can deliver innovative products and services customers want and need. The committee has met with more than 25 core providers, half a dozen middleware providers, and various other organizations related to core processing. As a result of those meetings, the committee has developed a range of resources to assist banks in managing their core relationship, including ABA’s Principles for a Strong Bank- Core Relationships released in 2019, which are actively being used by banks today.

The survey shows that the ABA Core Platforms Committee’s efforts have been well-received by banks across the country. Three-quarters of those surveyed believe the committee has effectively encouraged core providers to address bank concerns. Two-thirds of banks are better equipped to manage their core provider relationships thanks to the resources developed by the committee, according to the survey. “I’m pleased but not surprised to see banker appreciation for the work of the Core Platform Committee in the survey,” said Nichols. “The banker volunteers on the panel continue to push for new and different resources to help banks successfully navigate their core relationships and take charge of their technology roadmaps.”

The latest ABA technology resource for banks unveiled at the Conference for Community Bankers is a new report titled “Exploring Banking Middleware Solutions.” Middleware, which can help bridge legacy technologies with new applications, is popular among banks with substantial investments in legacy core infrastructure that want to mitigate the risk of change. The report explores three strategic benefits of leveraging middleware in the banking technology stack, including reducing reliance on a legacy core to deliver products faster and make future conversions easier; building a single source of truth for customer data, leading to a better customer experience; and fostering partnerships with fintech companies.

The report is the fourth in a series from ABA’s Office of Innovation, which provides strategic guidance on trends impacting banking and technologies needed for banks to stay competitive, and also advocates for policies to allow banks to continue innovating in today’s rapidly-evolving market. Previous Office of Innovation reports covered digital lending, cryptocurrency, and digital identities. The 2022 Core Platforms Survey results are available at