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The Core Way Forward is the second annual report by the Business Performance Innovation (BPI) Network assessing the implications of core processing and IT services contracts on community banks and credit unions. Our new report reviews current challenges and priorities facing community financial institutions and how vendor contracts and services impact those issues in profound ways. Core and IT services contracts with critical vendors such as Fiserv, Fidelity (FIS) and Jack Henry represent one of the two or three largest areas of non-interest expense for most institutions.

In fact, based on our analysis, community financial institutions are reducing the outsource processing fees they pay vendors by as much as 10-42 percent by renegotiating their contracts with existing vendors at the right time, utilizing available market intelligence. On average, institutions we tracked for this study would save $1.2 million by restructuring their contracts based on national fair market pricing, with no need to go through the hassles and disruption of changing systems or an extensive competitive bid process.