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  • The Customer Impact of Modernizing your Core Banking System Technology

    The journey of modernization can be a tad long, potentially taking several months if not years to be fully implemented. However, the benefits are not wait listed. They are gradually incremented to sustain a digital transformation. With consumer demands on the rise, user experience a priority and security being the ultimate test - a legacy core banking system might not fit the bill anymore.

    Legacy infrastructure creates a spaghetti of interlinked technologies, making it harder to maintain and customize, further raising IT costs. A bottom up digital transformation can only begin by shaking up the very foundations of your Banking System. Modernizing your Core Banking System by leveraging newer technologies such as cloud will offer improved speed, flexibility in adding features, and the ability to speedily drive projects and enhance customer experience.

    What is a Core Banking System?

    A Core Banking System is essentially the fulcrum upon which every Banking activity pivots. Activities such as transaction management, KYC, customer onboarding, and even calculating interest rates run right through it.

    Integral Core-Banking Services

    More precisely, however, it would be accurate to describe it as the back-end system that acts as a storehouse which facilitates the movement of these processes through multiple channels like automated machines, internet Banking and actual branches. With real time Banking facilities, a Core Banking System provides a cohesive structure to things running in ten different directions. A centralized model ensures efficient business activities and minimizes the need for manpower tremendously.

    What’s wrong with the legacy Core Banking system?

    Hindering an agile work model is only the tip of the iceberg. The legacy Core Banking System tends to suit slower lifestyles. One of its major tenets is reliability, but it is still falling short of some demands today. It lacks the ability and flexibility to respond to the rapid changes in consumer preferences and business needs.

    The legacy Core Banking System is now decades old. Its systemic models are often unequipped to handle newer volumes of data or match with the required speed. Legacy Core Banking Systems are also limited in their ability to interface with other systems, which puts them at a great disadvantage. Additionally, their complex and custom code arising from excessive undocumented customization also slows down upgrades and integration with third party applications.

    The over reliance on the legacy Core Banking System has also given birth to another problem - a dearth of the right talent. The technical personnel equipped with the know how to manage and maintain systems leveraging decades old technologies are a dying breed. With poor integration abilities, a legacy Core Banking System can actually restrict growth and M&A execution.

    What is a modern Core Banking System?

    A modern core is a next-generation system, which can be based on a cloud based micro-service architecture. Cloud computing removes the need to invest in specialized hardware or software. Moreover, a cloud system can respond quickly to changes in market or technological preferences. It can easily allow you to scale your platform depending on what the situation calls for. A modern core can also include a collection of products. For example, products such as Infosys Finacle, Nucleus FinnOne (for digtal lending) or even Oracle's Flexcube. Go-Live Faster can guide you in choosing the right product and correct cloud computing system for your data requirements and target segment. From providing feasible options to testing the appropriate fit, Go-Live Faster helps accelerate your system implementation and launch while managing costs and overcoming migration waves.

    What does modernization offer?

    A knee jerk reform can pose several risks and challenges. A bottom up approach cannot fit each Bank and its history. Interestingly, modernization can occur at various levels and can be more targeted. Rather than changing the core entirely, modernization can occur in steps. Whether it is minor tactical changes or re-scaling entirely, the lifespan of your Core Banking System is sure to increase at every step of the way. Altering your Core Banking System involves a complex strategic decision. It is a massive change with far reaching implications going beyond revenue impact. This is why it is critical for Banks to identify their complementary technologies and carefully integrate the same.

    For the best fit solution, choosing the right system is equally important to strategizing its usage. With Go-Live Faster’s readiness assessments and Go-Live Score models, your Bank will be able to predict and resolve defects, and identify the right solution to safely expedite the implementation of such a technological transformation.

    An application programming interface (API) is also easier to implement when Banks choose to modernize their core. APIs allow multiple applications and software to interact with and obtain data from each other. API offers a much simpler means to share data and is the basis of Open Banking. It also improves communication with third parties which can then quickly access the Bank’s database. With a more focused approach on specific components, sharing services, adding revenue streams and creating distribution channels can now minimize costs while also shaping a holistic system.

    A modern Core Banking System also accelerates communication between Banks and customers, allowing for greater awareness of relevant insights and notifications. Under normal circumstances, the consumer leaves once the point of interaction is closed. A modern Banking system, however, ensures a routine of communication. After analyzing each customer touch-point and flow, it is possible to understand how to meet the customers’ changing needs. This further stabilizes consumer retention and creates a loyal base.

    Is Modernization better for consumers?

    Banks are now expected to process real time transactions and launch products and features faster and more frequently.

    A growing number of consumers require a real time experience that benefits their overall everyday movements. They don’t just need Banks to store but offer much more. When it comes to data management and data security, a modern system has that covered too. A robust data management strategy is imperative across all Bank channels that manage and utilize consumer information effectively. Using this to give out personalized advice, promotions based on activity and frequent offers creates a solid bond between customers and their Banks.

    Benefits of a modern core banking system

    With the number of digitally active consumers increasing, online activities are mandating better user experience and personalization. Personalized messages, alerts and financial advice, and mobile apps are steps in that direction. A Bank leveraging innovative core technology to transform interactions is a Bank that thinks about its consumers. Moving money instantly or making quick-time payments are only a few things that make the lives of consumers much easier. Banks can adapt faster by collaborating with a fintech such as Go-Live Faster with a thorough understanding of the changing consumer needs and the multiple technologies that govern the BFSI industry. Through its domain expertise, Go-Live Faster can quickly help your Bank adapt, remodel and roll out new systems and features to enhance your digital customer experience.

    Conclusion

    To ensure the effectiveness of real time payments, better experience for users and fast data transfer, modernizing your Core Banking System is the change you need to implement. A modern Core Banking System also innovates and releases new products and services with simpler code changes and ease. Following a componential approach of systemizing, IT costs and budgets can also be dramatically minimized while implementing this Banking system.

    Additionally, a modern Core Banking System enhances integration abilities, agility and adaptability. It allows for easier collaboration with third party applications and systems. A Modern Core Banking System can future proof your Bank from the constantly evolving and changing consumer preferences, and Go-Live Faster’s BFSI industry veterans and domain experts are here to make that a reality. Through collaborations with multiple Banks, over the years, our experts have already accelerated their core modernization by making technology implementations more predictable.

    Connect with us if you are ready to take the next step in your digital transformation journey. Let's enhance your Bank’s business agility and customer experience with a modern Core Banking System.

    November 30, 2020

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