Report: A new decade of core banking transformation
In a world where headlines can be dominated by new technology like artificial intelligence, quantum computing, application programming interfaces (APIs) and more, it can be easy to overlook the long-time workhorse of the financial services sector.
The core banking system has sat quite literally at the heart of major banks the world over for decades. These platforms are so mission critical to financial institutions that they spend millions in keeping them maintained. A core banking system needs to handle a high volume of transactions all day, every day without interruption.
Legacy core banking systems have usually been value for money, in that their reliability can be assured no matter their age. Despite many of the world’s largest institutions sitting atop software that can be traced back to the 1980s, outages are a relatively rare occurrence.
The issue is that when these outages do happen, the consequences can be severe. A bank’s services going down for extended periods of time can attract attention from regulatory bodies and government officials, lead to hefty penalties and loss of revenue, and result in a tarnished reputation in the eyes of the customer.
What is perhaps most worrying for banks is that as we enter a new decade the workhorse of the banking industry is being saddled with greater responsibilities and duties. A core banking system is expected to adapt alongside and connect to API services, digital banking portals, and all manner of value-added services.
An ever-more demanding customer base has led to an expectation that banks process their transactions in real-time, connect to the latest fintech services, release new features on a (comparatively) lightning fast schedule, and compete with emerging competitors who aren’t dragging 30 years of legacy technology behind them.
2020 is proving to be a landmark year in more ways than one. The COVID-19 pandemic has shifted already-nascent digital strategies to the forefront. The need to provide always-on digital services to a customer base no longer turning up to the branch or the ATM has had plenty of financial institutions glancing over their shoulders at the back office. But how can a bank know the time is right for change, and how do they go about it?
FinTech Futures has created a new industry report into what a core banking transformation looks like in 2020 and beyond, featuring expert input from Ohpen, HSBC, and Santander. It examines the issues facing banks looking to switch out their core systems, what options are open for a core transformation, and what the core banking system of the future will look like.
CLICK HERE TO READ THE REPORT