WHO SHOULD READ THIS

Senior bank and credit union managers who want to better understand the dynamics of vendor contracts for core-processing, debit-processing and eBanking services, and negotiate the best
deal for their institutions.



KEY TAKEAWAYS

A vendor oligopoly
Four vendors control 95% of the market for core and debit processing and eBanking services. It’s an oligopoly that processes billions of commodity-like transactions per day.

Buyer beware
Unlike other commodity-based oligopolies, vendors keep pricing opaque. A market rate that is fair to both financial institutions and vendors exists, but most institutions don’t know what it is because the vendors won’t say. That leads many financial institutions to overpay. Some institutions pay up to three times more than others for essentially the same services.

Smart negotiations, positive results
Bundling together negotiations for core, debit processing and eBanking services, aligning contract termination dates, involving senior management in negotiations, and getting assistance and market pricing data from a trusted advisor can lead to better contract terms, allowing an FI to reduce expenses and add new capabilities.