Why banks must embrace digital core platforms

Modernising a bank is not easy and most of the difficulties come down to legacy systems. Banks need to adopt new digital core banking platforms, but what’s blocking adoption are the worries that come with transferring data from a legacy system to a new digital one. The two main worries any bank has when looking to modernise systems are:

1. Will it work successfully?

2. Am I going to lose data?

However, most banks don’t find out these answers until it is too late. By this point the bank has already spent money in building the platform and the core migration has already taken place. In fact McKinsey has found that less than 30% of first generation CBS replacements  have succeeded and building these systems in-house often costs organisations anywhere from €50 million to €300 million.This is far too much money, but there is a solution out there.

A solution

One solution is banks adopting core banking platforms that are already built on modern technology. A digitally native banking platform can offer flexibility, this is crucial given the amount of regulation banks have  to abide by in today's world.

Consider PSD2 and in particular the open access changes as part of XS2A, or the new ISA rules introduced in the UK - traditional banking infrastructure simply cannot react fast enough to take full advantage of the opportunities these changes present. Therefore banks and financial services must adopt a core banking solution that's efficient and flexible to enhance customer experience.

Efficient

Because life’s too short to wait for a multi-year delivery plan, banks need a platform that is up and running in next to no time. We live in an on-demand society. When we want things, we want them now or as fast as possible. This boils down to the everyday things from buying food, to ordering taxis. So why should banks be any different?

Flexible

A successful core banking platform must be flexible. Not all banks are the same, just like their customers. Banks need a platform that gives them the flexibility to build what they want, when they want. A platform that caters for everyday customer services such as bespoke mortgages and pet insurance - meaning products should be more responsive.

Life events change, people move addresses, move jobs, salaries can alter. For a bank to be able to craft new customer journeys, its platform should not be fixed.

Great Experience

AirBnB, Google, Spotify, Starbucks, Uber all these companies offer a great experience. Sourcing great accommodation, choosing your favourite song or even ordering a pizza can all be done within seconds seamlessly from your phone. Banks need to offer this experience too and what lets them down are  traditional banking systems.

A successful digital platform can transform the bank experience. It enables banks to build and operate innovative products that serve customers with changing circumstances and needs. The static view of customers in banking can now be a thing of the past and it’s all because of technology.

Do banking better

The thing to remember is that loans and mortgages haven’t changed. Accounts haven’t changed. Nothing has changed in terms of what people can get. We’ve not gone from driving a car to flying a plane, the fundamental aspects of banking have not been altered.

What’s changed is C-level executives no longer have to be tied down to legacy systems. Large banks can embrace new technologies and banking can be done better, cheaper and faster all through state-of-the-art digital banking platforms.