Single-Provider vs. Best-of-Breed ERP: Which is the Right Solution For You?

Best of Breed ERP

Single-Provider vs. Best-of-Breed ERP: Which is the Right Solution For You?

When it comes to choosing the right ERP system, financial services companies face an important decision: go with a single-provider platform that offers everything under one roof, or a best-of-breed approach that selects the top solution for each specific need.

Both strategies have their advantages and potential drawbacks. 

For mid-sized financial services companies, the choice often comes down to priorities like integration, flexibility, scalability, and long-term support.

Single-Provider ERP: The Benefit of Integration

One of the main benefits of using a single-vendor ERP is the integration across all business functions. With a full suite of solutions under one ERP, businesses have the convenience of using a single platform for all core functions. 

However, convenience can come at a cost, especially in an evolving financial landscape. 

Some challenges that institutions may face with getting a single-provider ERP include:

  • Vendor Lock-In: Companies deeply embedded in one ecosystem can struggle with flexibility, particularly during mergers and acquisitions.
  • Dependency: Fintech conglomerates that offer a full suite of solutions may sunset core systems and shift directions without warning. This is the risk of relying solely on a single vendor.
  • Solutions Not Created Equal: When a single vendor offers multiple applications, it is often through assembling multiple solutions and multiple layers of acquisitions.  The result is that the competency of each solution may not give you the level of results you are looking for. What you’re left with is a system that could excel in one area but fall short in another. 
  • Lackluster Support: When problems arise, getting effective support is critical. Multiple rounds of acquisition can create high turnover in the support department, and support personnel are often trained across several applications. Having highly specialized support teams can solve a customer’s issues faster and with more efficiency.

Best-of-Breed ERP: Focused Innovation

Focused solution = focused innovation.

With a best-of-breed ERP, you pick and choose the individual solution that is right for each practice area. 

This approach offers:

  • Specialization: A bespoke ERP with hand-picked solutions means a specialized solution for each area, including Accounting, EPM, Compliance, and HR/payroll. This results in deeper functionality, stronger performance, and a better user experience.
  • Flexibility: A best-of-breed approach enables organizations greater flexibility and personalization as they build out their tech stack strategy. It is easier to replace or upgrade components without overhauling the entire ecosystem.
  • Future-Proofing: Instead of being locked into a single system that may eventually become discontinued, a best-of-breed approach gives your institution the flexibility to adapt and grow with your business.

Which Solution is Right for You?

Ultimately, there’s no universal answer. 

A single-provider ERP can offer the ease of integration and centralized management. A best-of-breed ERP delivers flexibility and the ability to tailor each solution to a specific function.

No matter which approach you choose, a reliable provider is key.

Business people using Flexi Why Flexi? 

Flexi has supported financial institutions for over 30 years, delivering powerful, dependable accounting tools built specifically for the needs of banks and credit unions. 

Flexi’s software is tailored to the operational, compliance, and reporting demands while ensuring a seamless and efficient process.

Contact us for a free demo.

Why Modern Accounting Systems Are Essential for the Future of Banking M&A

banking M&A

Why Modern Accounting Systems Are Essential for the Future of Banking M&A

Since 2018, credit unions have been increasingly active in acquiring banks, peaking in 2024 with 22 credit union acquisitions, up from the previous high of 16 in 2022.

While the overall number of credit union mergers has decreased compared to the previous decade, the total assets acquired in mergers increased by 58% in 2024, compared to 2023.

What’s driving the future of M&A in banking?

  1. Regulatory Uncertainty – Stricter compliance requirements make it costlier for smaller banks and credit unions to do business. For many financial institutions, a more ambitious M&A agenda may be easier to pursue under the new federal administration, which is expected to relaxing banking regulations.
  2. Fintech Disruption – Traditional banks are merging to enhance digital banking services and remain competitive.
  3. Operational Cost Reduction – Consolidation allows financial institutions to share infrastructure, reduce redundancies, and improve profitability.
  4. Economic Uncertainty – Institutions are seeking stability through strategic partnerships and acquisitions to navigate fluctuating interest rates and economic shifts.

Two buildings merging together to symbolize M&A activity

Mergers & Acquisitions Trends in Banking & Credit Unions

  • In 2024, 215 deals that were greater than $30M in value were announced, compared to 151 deals of the same value in 2023.
  • Among the top 50 U.S. banks, there were 3x as many banks open to acquiring or actively pursuing acquisitions in 2024 vs. 2023.
  • A recent survey found that 65% of financial institutions view M&A as a strategic priority for expanding market reach and enhancing digital offerings.

Source: S&P Market Intelligence

While M&A can bring growth opportunities, it also introduces significant financial complexities. 

Accounting Challenges When Merging Financial Institutions 

  • Financial Data Consolidation – Combining different accounting systems, reporting structures and financial records is complex and time-consuming.
  • Regulatory Compliance & Reporting – Banks and credit unions must be able to adapt to changing reporting requirements, which become more intricate during mergers.
  • Accounting Policy Differences – Variations in revenue recognition, loan classifications, and other accounting methods must be reconciled to ensure financial accuracy.
  • System Integration Issues – Legacy accounting software may lack the flexibility to integrate with a newly merged entity’s operations.

A modern accounting system designed specifically for banks and credit unions can streamline the consolidation process and ensure compliance. 

How a Modern Accounting System Simplifies M&A Integration

  1. Seamless Financial Data Integration

A cloud-based accounting system designed for financial institutions can automatically consolidate financial records, ensuring real-time accuracy and reducing manual data entry errors.

  1. Automated Regulatory Compliance

Regulatory frameworks such as CECL, FAPP, and FDIC reporting require precision. A modern accounting system ensures automated compliance, reducing risk during audits and regulatory reviews.

  1. Real-Time Financial Visibility

M&A success depends on data-driven decision-making. A robust accounting platform provides real-time dashboards, financial forecasting, and analytics to support growth strategies.

  1. Scalability for Future Growth

As banks and credit unions continue to grow, a scalable accounting system accommodates additional branches, loan portfolios, and regulatory changes without disruptions.

  1. Streamlined Operational Efficiency

By eliminating redundant processes, reducing manual reconciliation, and enhancing financial reporting, merged institutions can operate more smoothly from day one.

See how Idaho Central Credit Union (ICCU) automated its accounting process and saw a significant impact on productivity.

The complexity of merging financial entities demands a robust accounting framework to effectively manage financial reporting, credit risk assessments, and tax implications. 

As the banking and credit union landscape continues to evolve, institutions that invest in a modern accounting system that is purpose-built for their unique business challenges will be better prepared for future mergers, acquisitions, and regulatory shifts.