Community Bank Guide to Managing Core Processor Relationships

By Deborah Matthews Phillips

For community banks looking to strike a balance between high-touch services and high-tech capabilities, selecting the right technology partner is more critical than ever. This decision is amplified when it comes to selecting a core processor, which represents a key strategic partnership, given their role in supporting community banks’ long-term technology and business objectives and continued success.

According to the 2020 ICBA Core Processor survey 63 percent of community banks have used the same core processor for six years or longer; and more than a third have maintained their relationship for 20 years or longer.

Because most community banks’ contract terms vary from four to eight years, it is essential to nurture this long-term relationship to maximize the bank’s investment. Bankers should be proactive and intentional in establishing frequent, and transparent communication.

Executive management should set clear expectations for their core processor and communicate vital information about their customer and community footprints as well as the bank’s vision and strategic direction. Core processors can play a valuable advisory role by providing information on new and enhanced products and services, modern technology, and marketplace developments.

Available ICBA Resources for Community Banks  

To assist ICBA members in navigating these critical decisions and effectively managing their vendor relationship, we launched the Core Processor Resource Center. This site features valuable resources, including handy checklists for managing the relationship with the bank’s technology provider and an updated version of the ICBA Core Processor Resource Guide.

The white paper provides a range of critical considerations for community banks, including steps they should take to evaluate their core processor. The guide also offers insights into negotiating contracts and core conversion project management for banks that decide to switch systems.

While three-quarters of community banks participating in ICBA’s survey ultimately choose to retain their current core processor relationship to avoid the time and resources associated with a core conversion, this exercise can help ensure that a bank is using a core vendor that best supports the bank’s strategic objectives, facilitates future growth, and provides speed to market with the most advantageous terms and pricing possible.

For other new ICBA member-only resources please visit

Deborah Matthews Phillips is senior vice president of payments and technology policy for ICBA and senior vice president, industry relations for ICBA Bancard.