Why Everyone Wants to Own Your Core System
By: Paul Schaus
June 30, 2026
If you have watched the core banking market lately and felt like the nameplate on your vendor keeps changing, you are not imagining it: the systems that run America's banks and credit unions have become some of the most sought-after assets in financial technology. The question is not which deal comes next, but why decades-old back-office software has become catnip for private equity and strategic acquirers — and what that says about the business you are a customer of.
Start with the deal that set the tone. In 2022, Centerbridge and Bridgeport Partners took Computer Services, Inc. (CSI) private in an all-cash deal worth roughly $1.6 billion — a community bank core most people outside banking had never heard of, at a multibillion-dollar price. It has not slowed down. Finastra just dismantled its core franchise in weeks, selling its U.S. mid-market business and the Phoenix core to CORA Group and agreeing to sell its global Universal Banking business to Pollen Street Capital — and every piece found a willing, well-capitalized buyer.
None of this started with CSI or Finastra. The consolidation of core banking is four decades old, and the biggest names are its products, not its authors. Fiserv grew by acquiring scores of companies since the 1980s; its flagship DNA platform arrived with the 2013 purchase of Open Solutions. FIS assembled itself the same way, rolling up Alltel's Systematics, then Metavante in 2009 and SunGard in 2015. Finastra itself was only Misys and D+H bolted together in 2017 — a roll-up now being broken up by the same forces that built it. You can see the arc on a single vendor's product page: the cores FIS still markets — HORIZON, IBS, Systematics, Profile — and Fiserv's Premier, Signature, DNA, and Portico were once separate companies. Two firms now hold dozens of nameplates that used to compete.
The shrinkage is measurable and quick. When CCG Catalyst catalogued the U.S. core market in 2022, it ran to dozens of independent platforms; in just the few years since, a striking share have been acquired or merged away — including Share One and VisiFI combining into Deda Sphere under Italy's Dedagroup. The field of independent cores shrinks almost every quarter, and many "new" names are not new cores at all, but new owners wrapped around old ones.
The marquee deals are only the top. The same gravity pulls on the second and third tiers. The most recent example is about as far down-market as it gets: in early 2025, Finovifi acquired Modern Banking Systems, a real-time community-bank core founded in 1964. Some of the most telling buyers are permanent-hold roll-ups: Banyan Software bought Lincoln-based Automated Systems in 2024 under an explicit "buy and hold for life" model; SHAZAM bought the assets of Nicola Banking Systems; and UFS and BankOnIT united under the new Navanta brand in early 2026. Higher up, the prices get bigger: Fiserv bought the rest of Finxact for about $650 million and SoFi paid roughly $1.1 billion for Technisys; IBT Apps went to Continuum Venture Partners.
The credit-union side mirrors it. Sharetec, via its parent Bradford-Scott Data, now sits inside Evergreen Financial Technology Group, the Alpine Investors-backed collective. With the incumbents long since spoken for, Corelation, the San Diego next-generation provider, is one of the few sizeable independents left and an obvious target.
A few hold out. FPS GOLD soldiers on in Provo, and a handful of regional, client-owned cooperatives endure for a structural reason the others lack — their customers are their owners, so there is no one to sell. COCC, client-owned in Connecticut since 1967, runs core processing for community banks and credit unions across the Northeast; banker-owned DCI does the same from Kansas. In a market built to be bought, the durable independents are the ones that cannot be.
One set of players is conspicuously absent. FIS, Fiserv, and Jack Henry — who together serve more than 70 percent of U.S. banks — are not acquiring community cores. They already own stables of them, and their play is to hold and gradually combine what they have, migrate customers toward strategic platforms, and modernize selectively. Jack Henry, for instance, still sells SilverLake and Core Director to banks and Symitar — now with a cloud-native EASE option — to credit unions, while an older platform like CIF 20/20 is supported for migration rather than promoted for new sales. Where they want genuinely modern technology, they increasingly build rather than buy: Jack Henry's Google-powered Jack Henry Platform and FIS's Modern Banking Platform are cloud-native cores grown in-house. Just as important, they are not selling the cores they have acquired — a legacy core with a sticky, renewing base is a cash machine you keep running. So the buying happens all around the incumbents, while the big three sit on the largest installed bases and let the economics compound — which, more than any single deal, tells you how good these economics are. The people who know the business best are holders, not sellers.
Core banking is, financially, close to a perfect software business. The revenue is recurring and contracted. Fiserv's recurring revenue runs around 91 percent, so most of next year's revenue is on the books before the year begins. On top of that sit software-grade margins: mature software typically carries gross margins of 75 percent or better and EBITDA multiples of ten to fifteen times, and the incumbents convert that into operating margins most industries would envy. Because that cash is so predictable, a buyer can also finance it with debt — recurring revenue, high margins, and financeability are the holy trinity of the leveraged buyout, and core banking has all three.
Predictable revenue is only valuable if it stays — and this is where core goes from attractive to extraordinary, because the switching costs are among the highest in enterprise software. Contracts commonly run five to ten years, and the integration is so deep that even unhappy customers stay put. For a buyer, that stickiness is the whole proposition; low churn turns a software company into an annuity. But notice the same fact from the other chair: the moat that makes your core a prized asset is built out of your switching costs and your contract length. The economics that attract the buyer are the friction working against you — and a reason to negotiate term, price-escalation, assignment, and deconversion with the seriousness the asset's own economics imply, as I argued in my Buying Like a Professional series.
The incumbents are prized for their cash flows; the newer, cloud-native cores are prized for the opposite — growth and greenfield. A fourth generation has emerged with API-first architecture and drawn enormous capital. Thought Machine has raised more than $500 million and runs its Vault Core at banks including Lloyds and ING; in the U.S., OBS's CloudCore has brought an open-API core to community institutions, part of the fourth-generation cohort I track. The capital is not shy: Mambu drew an EQT-led investment valuing it north of $5 billion, 10x Banking raised from BlackRock and JPMorgan, and Tuum took strategic investment from Citi Ventures. They are bought not for cash today but for their option on the largest replacement cycle in a generation. The incumbent core for its annuity, the challenger for its future.
That said, the thesis carries real risk. AI is already pressuring software valuations and economics, and the durability of legacy-core relationships cannot be assumed indefinitely. These acquisitions only make sense if buyers accurately estimate how long that stickiness can continue to support the model.
For the institutions that run on these systems, the takeaway is practical. Your core is a financial asset that will keep changing hands, and the owner's investment philosophy — strategic permanence, private-equity invest-and-exit, growth-stage venture — will shape your roadmap as much as the technology will. When your core changes owners, read the buyer, not the press release, and revisit your contract while the change is fresh. Watch for it even when nothing on your screen changes: in most deals the product keeps its name — Phoenix is still Phoenix, Finxact is still Finxact — and only the owner on the cap table changes, easy to miss precisely because the nameplate survives.
The deals will keep coming, because the math keeps working. The institutions that do best recognize their core for what it has become — a prized financial asset whose value is built, in no small part, on their own cost to walk away — and price that reality into every contract they sign.
CCG Catalyst advises community and regional banks, credit unions, and fintech companies on core and digital strategy, vendor evaluation, and contract negotiation. If your institution is weighing a core decision, a renewal, or what a change of ownership at your vendor means for your roadmap and your economics, reach out to our team at www.ccgcatalyst.com. For related reading, see our Sector Spotlight on fourth-generation core systems and the full library at CCG Insights.
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By: Paul Schaus | Founder & Managing Partner, CCG Catalyst Consulting
Disclaimer: The views expressed in this article represent the perspective of CCG Catalyst Consulting based on our direct experience advising financial institutions. This commentary is intended to stimulate industry discussion and does not constitute legal, accounting, or regulatory advice.
