March 19, 2018
Banks can no longer put off, piecemeal, or underfund digital transformation initiatives.
It is now a clear business directive and essential for bringing new products and services to this digital-first world. At the heart of any digital transformation is the revitalization or replacement of legacy core systems. All other emerging technologies and IT priorities—analytics, digital, the cloud—are dependent on the underlying data and processes of the banking core.
But with some 60% of core banking projects taking as long as four years to complete, according to an American Banker survey, banks must be realistic about the project’s requirements and create a structured, detailed roadmap to ensure the best outcome.
Wholesale transformation must be on the table for banks with decades-old core systems. Incremental improvements will likely not position the bank for the rapid-fire pace of change that’s on the horizon.
Options for Core Projects
It all starts with building and acknowledging a business case for digital transformation and, by extension, modernizing core banking. While business case analysis often focuses on avoiding or reducing costs, the loss of current or potential banking customers coupled with organizational paralysis should outweigh the pain of technical investments.