Nine questions banks should ask a potential core technology partner
Meeting banking customers’ demands in and outside the branch requires a balance of cutting-edge technology and support that legacy cores don’t always offer. But converting to new enterprise banking solutions is such an undertaking that it can seem like a heart transplant to many institutions.
So, whether a bank is actively seeking a new core or simply wants to understand its options, it must ask the right questions. The following nine can help determine whether a technology provider is the right fit.
Question 1: What is your technology strategy and vision for the future of banking?
A provider’s technology strategy and vision should align with your business objectives and be able to adapt to changing industry trends and customer needs. Banks may ask how they conduct research and development for their core banking software. Do they have sufficient internal resources dedicated to it, or do they allocate resources elsewhere?
They should also consider a provider’s approach to emerging technologies like open banking, artificial intelligence (AI), machine learning (ML) and data analytics. What opportunities does the provider see for these technologies, and how are they working to leverage them?
Question 2: What’s your process for adding enhancements, and how do you charge for that?
As the financial services industry evolves, enhancements to core banking technology (including new features and patches) are inevitable. Therefore, it’s crucial to understand a potential partner’s process for adding new features and the costs involved.
Bankers should ask about their product roadmap, the process for submitting enhancement requests, how they prioritize their development roadmap and associated costs. Responses should align with the institution’s business objectives and budget. The last thing anyone wants is to be nickeled and dimed down the road and spend significantly more on maintaining their core banking system in the long run.
Question 3: What percentage of your platform is exposed to APIs?
Application Programming Interfaces (APIs) enable banks to integrate third-party solutions into their core banking platform to provide the optimum customer experience. Therefore, it’s essential to ask a potential partner about their API strategy, including how many APIs they offer, how they are managed and how tight are their security standards.
Ultimately, an open banking platform with a healthy approach to the open ecosystem will help the financial institution grow. Open banking facilitates the development and deployment of innovative banking solutions beyond a bank’s existing offerings without banks needing to build them internally or rely entirely on their core provider’s offerings. It also enables exciting opportunities like Banking as a Service (BaaS).
Question 4: What’s your average contract length?
Knowing the typical length of the provider’s partner contracts will help the bank plan and budget for the future. Some providers require long-term contracts, limiting banks’ ability to switch vendors if they are unhappy with service. By contrast, others may offer more flexibility.
Understanding the contract terms, including the renewal process, termination clauses and fees, is critical. Will the pricing remain the same if the institution is satisfied and renews it once the contract ends? If it must switch cores early, are there early termination fees? Clear answers will better inform budgetary planning and technology strategy while previewing cultural fit.
Question 5: How do you measure the quality of your customer support?
A core technology partner should be supportive behind the scenes so the bank can focus on what matters. So, it’s wise to ask about their customer satisfaction scores, how they track and report support tickets and how they respond to complaints.
A core vendor that confidently answers these questions is a good sign. One that shies away may be a red flag. Requesting a list of existing customers to follow up with is also advisable. Banks typically work with a core vendor’s staff for several years, and existing customers could note the lackluster or insufficient support they have received.
Question 6: How many customers does each relationship manager support?
The vendor’s customer relationship manager-to-bank ratio is another helpful metric to gauge the support banks can expect. Consider it a classic case of quality or quantity. If a relationship manager is tasked with supporting too many customers, they may struggle to provide adequate support or take sufficient time to resolve any issues or questions.
An effective manager-to-bank ratio gives your institution’s staff a better chance of being treated like a person rather than a number. By knowing your relationship manager and vice versa, your interactions throughout the years will also run much more smoothly.
Question 7: How frequently will my relationship manager meet with my bank?
Regular communication with your technology partner helps ensure your business runs smoothly. As an offshoot of the previous question, it’s essential to understand the frequency of meetings with your relationship manager and how they prefer to communicate.
Remember that a true partnership has ongoing, two-way communication. You may prefer your relationship manager to come onsite regularly or conduct video or phone calls more frequently. An engaged relationship manager will establish clear means to hear from you often.
Question 8: How many support tickets do you log each week?
The number of support tickets that a core technology provider receives can tell you a lot about the quality of their technology and the level of support they offer. If they receive a high volume, it could indicate that their technology is unreliable or understaffed.
All the bells and whistles are only helpful so long as they are functional. By asking this question, you’ll hopefully sidestep obstacles in the future. This question may also provide insight into the overall satisfaction and potentially lost business you can expect.
Question 9: How quickly do you resolve support requests, on average?
With technology, there will occasionally be hiccups, so the previous question may only tell part of the story. If a core provider logs a high volume of support tickets but quickly and effectively resolves them, they likely have a strong support team.
Banks should ask potential partners about their response times, including their Service Level Agreements (SLAs), for critical issues. They should have a system for tracking and reporting on resolution times. This question is also an excellent opportunity to evaluate how they communicate should a problem arise.
Finding the right core banking technology partner
The search for the best core platform can be arduous and involves long conversations with technology providers, consultants and peers. Asking the right questions each step of the way can help banks make an informed decision and find a partner that provides a balance of exceptional tech and service.
For a more holistic view of a successful core partnership, from selection to conversion, don’t miss CSI’s Definitive Guide to a Modern Core Banking Partnership.
About the author
Allison Maddock serves as senior vice president and chief product officer, a role in which she leads CSI’s product management team to deliver solutions aligned with CSI’s vision and strategy. As a member of the executive leadership team, she uses her product management, strategy, operations and technology expertise to advance CSI’s products and services.
Maddock has built cross-functional product management teams at multiple organisations, incorporating product, market and user research and design into each team. Before joining CSI, she managed mortgage lending products at Franklin American Mortgage and Wells Fargo. She also holds product management experience in personal financial education from her time at Ramsey Solutions as well as ServiceMaster, a national home service brands provider.
She earned a marketing degree from Texas Christian University and a Master of Business Administration from the University of Phoenix. Maddock also holds multiple certifications, including Certified Scrum Master, Large Scale Scrum (LeSS) certification, and Six Sigma Black Belt and Green Belt, and has trained with Silicon Valley Product Group.
Sponsored by CSI, the winner of the Best Core Banking System Award at Banking Tech Awards USA 2023