Plataforma de banca moderna FIS
Haga avanzar su banco con una plataforma central moderna.
Three Ways to Overcome Legacy Core System Constraints
August 31, 2018
If your core banking system is decades old, you’ll know that the proliferation of channels and the rise of digital banking have added further stress to an already-overburdened platform. The idea of somehow modernizing your operations may seem overwhelming, unaffordable and just plain impossible.
You’ve explored the options. You can simply start over from scratch – a “rip and replace.” According to a recent EY1 report, “such full core replacement transformations can and have consumed over $350 million and more than five years on average in a number of recent documented examples.” As Celent noted, the process of switching out a core system has been likened to changing the engine on an aircraft in flight.2
A compromise is to set up a separate, digital-branded bank, sometimes referred to as “try and buy.” The legacy system remains in place, and Baby Boomers and Gen Y customers can continue banking as they have for decades – visiting branches, telephoning for assistance and writing checks. The digitally focused startup then attracts Gen X and millennial customers.
While this approach meets the needs of many banks, others encounter regulatory challenges, resistance to any shifts away from traditional operating principles, and concerns about cannibalizing the bank’s existing customer base.
A growing number of banks are choosing a third way: the “surround and shrink” approach. This breaks the transformation down into a series of bite-size steps. New capabilities and accelerated enterprise business services can be rolled out to customers in a more timely and cost-effective manner while laying the foundation for full enterprise modernization over time. Along the way, the business logic and workflows that are created to achieve a specific goal for one line of business (LOB) prepares the bank for enhancing capabilities for other LOBs.
If you take this approach in a strategic and sequential manner, you can achieve substantial cost savings and deliver the new offerings that your customers demand more quickly.
Want to learn more? Download our white paper, “Un-riddling Core Modernization”.
1 CoreEY – Surgically replacing core banking platforms: A perspective on alternate approaches 2016 Wim Geurden, Matthias Loh, Jan Muralitharan and Bob Reveal.
2 Core Banking Systems for Large Banks: N.A. Version, December 22, 2016, James O’Neill and Stephen Greer.