Is your core banking system running your business or are you?
There is one overarching reason to move to a cloud-based core: to remain competitive. But what does that mean for your financial institution? In our conversations with community banks and credit unions, we hear a lot about how they want to move ahead and what’s causing them pause. Their growth strategies are various, but their obstacles can be traced to a single cause: their legacy cores.
Is your legacy core holding you back?
Legacy systems can no longer do what their operators want to them to do. Understanding why and being able to communicate the pain points to decision-makers is the first step in gaining buy-in for a move the cloud. Here’s a look at what financial institution leaders want and how their legacy systems are interfering with their success:
“We want to diversify our offerings and respond to emerging opportunities.”
Legacy systems don’t play well with others. You bolt on new products to try to reach digital dominance, but more inefficiencies are created and the labyrinth of solutions and services becomes harder to control. You try to impose order on this Tower of Babel, but there’s no way to make a hodgepodge of old and new technology work together in an orchestrated manner. When you want to innovate, all you hear is, “The core can’t do that.”
“Our account holders want an Amazon-quality experience.”
You can’t build every app and service that goes into fulfilling your vision of a best-in-class customer experience. And it wouldn’t make sense to do so when there are fintech companies that have already built superior products that can just be plugged into your ecosystem.
That is, if you can just plug them in. Most legacy systems are not able to accommodate new technologies and approaches. Launching a new product may require software changes, server patches, a review of network security controls, etc.. That’s before you can train your people or market the product. You need to use APIs to meet evolving customer needs or you’re missing out on the ability to innovate.
“We want to focus on growing the business.”
Your staff spends their time switching from one product to another as they perform simple tasks like updating addresses. They’re entering the same data multiple times, and each entry is a chance to introduce an error into the system. Your legacy workflows can’t integrate neatly (or at all), and you’re stuck with these manual processes that hamper a fast, consistent, and accurate user experience.
“We want actionable insight into our business.”
Trying to get data from so many systems into one readable comprehensive report is possible, but it takes a lot of programming. And then when you add a new solution or service or need a customized report, everything needs to be re-programmed again. That takes time and money.
Without a core that updates in real-time across every system, you can’t see how your account are behaving or how well your business is doing. Technical siloes are blocking your view.
The end of rip-and-replace
Your legacy core wasn’t built for the era of digital banking. You can make-do by adding on ill-fitting services and solutions, but that’s a stopgap that ultimately won’t yield the intended results. Instead, the technical environment will become increasingly unstable and difficult to manage while the needs of account holders go unserved.
As a technical influencer or a business leader, you already know this and you recognize some or all of these pain points. If your leadership thinks a shift to the cloud seems drastic, you can assure them this will be the last time such a big move is necessary. The future of banking is cloud-based, and the cloud is always whatever you need it to be.