Industry leaders have begun to integrate more advanced technology, with firms now dedicating upward of 50% of their technology investments into modernizing their core platform. The time and money saved after integration has reached as much as 30% for some organizations, making the choice to modernize core capabilities a more appealing one than ever.
In order for a bank to properly upgrade its technology and reap the full advantages of the process, it must approach the task strategically. Simply buying more powerful hardware or more expensive software does not adequately address the pain points that are unique to each bank. A successful strategy will spend significant time considering the following elements:
A strategic IT leader with a focus on the financial sector can provide a third-party view of the opportunities and gaps in your business.
Now more than ever, technology is meant to be seamless. Systems should work together, and it is critical that banks evaluate whether their current platform is able to integrate with other systems. Can APIs be utilized or developed to communicate with older and newer systems, bridging the gap between technologies? If not, processes are likely taking longer—and requiring more manpower—than they should.
Another important element for banks is scalability to grow without burdening the system. Was the platform originally developed to grow in tandem with the needs and requirements of the organization? How difficult is it to push up code changes, and does it require knowledge from specific experts or specialists to make changes? Modernization can make these niche tasks much more accessible and less time-consuming.
Every bank must abide by regulations related to the handling of confidential information. The process of integrating systems together can create vulnerabilities, and banks must implement measures to test and resolve these instances.
When modernizing a banking platform, it’s important to evaluate vendors’ behavior. Does the vendor continue to provide platform updates and patches on a regular basis? Has the vendor alluded to the possibility of platform functionality or phasing out features?
Most firms spend 20% to 30% of the typical investment to modernize their core banking strategy. Depending on your organization’s needs, you may benefit from a full core system replacement (in which the core system is replaced all at once) or a progressive modernization approach (where the existing platform is gradually modernized and enhanced over time).
No matter the modernization strategy selected, remember that this is a business initiative, not an IT project. Every company process should be reevaluated in light of the improvements, which will require the cooperation of experts focusing on the customer experience, compliance, data management, process redesign and more.
This plan should also evaluate how staff are using technology. Are staff spending too much time on tasks that could be automated or improved? Do staff need to be trained on the new technology that is being implemented? These considerations should be factored into the execution of the plan.
Whether you are at a loss for where to start with modernizing your banking platform or you have ideas but need help with the execution, the team at Hartman Executive Advisors can provide a thorough evaluation of your banking systems to identify opportunities, risks and gaps so you can increase your scalability and agility in the financial sector. Reach out to learn more or to schedule an appointment to get started.