Also, as banks try to stand out by making new products and expanding their markets, the need for flexibility and scalability in their operations and core banking systems grows. In the meantime, as banks’ IT systems have gotten older, differences between local platforms have stayed the same or even expanded.

1. Top 5 Steps to a Successful Core Banking Transformation
Core banking systems are becoming increasingly important to banks for several reasons. One is
cost reduction. Maintaining older platforms is expensive, becoming less and less acceptable for
FIs focused on their margins.
Also, as banks try to stand out by making new products and expanding their markets, the need
for flexibility and scalability in their operations and core banking systems grows. In the
meantime, as banks’ IT systems have gotten older, differences between local platforms have
stayed the same or even expanded. High maintenance costs, performance problems, and the
difficulty of making changes have also stayed the same or worsened.
Now that many banks expect growth again, the need to standardize core banking platforms and
replace core systems has become the spotlight.

2. There are many challenges ahead for CIOs.
 Speed to Innovation includes all technologies governing API enablement, big data, machine
learning, cloud computing, open service architectures, and machine learning.
 CX expectations customers crave a fully integrated digital experience that is personalized and
rewards loyalty.
 A legacy that comes from Siloed systems this impacts aspects such as time to market, systems
integration, and a challenge to provide a customer-centered approach.
 Volatile Regulatory Environment includes complex cross-border PSD2 and Open API mandates
and Open API and upcoming market reforms.
 External Competition. From Fintech companies and Peer-to-peer lenders and the rise of
cryptocurrencies, non-banks offer banking services like retail providers and payday lenders.
 Financial Pressures a push towards cheaper infrastructure and a more profound shift to more
automation reduce operational costs.
How to make a core banking transformation work – 5 steps.
Every core modernization story is different, and clients can protect their investments and save
time and money by making the process fit their needs. The playbooks are made with a single
client’s current and future architecture landscape in mind. If there are different approaches, then
banks must bring pragmatic approaches.
Start with an integrated Road Map.
That increases business capability and digital transformation. An integrated, custom-tailored
road map gives the bank new business capabilities aimed at achieving the bank’s business
priorities and has the real benefit of refreshing the technical architecture underneath.
Componentization Approach for Targeted Modernization.
There has been a growing trend toward breaking things down into smaller parts in the past few
years. Full “big bang” or “rip and replace” deployments are too risky for most banks, especially

3. the biggest ones. This risk kept many banks from replacing their core systems, which they needed
to do. Componentized solutions allow FIs to replace things in a less risky, more step-by-step way.
Prioritizing Tactical Modernization Needs.
Reduce the number of strategic investments that can’t be used again in the current scheme of
things, especially for core banking systems for the next ten years. Make a list of the tactical
changes that need to be made to the current core banking system, but only invest if there is a
pressing need.
Maintain High Readiness for Migration.
This step involves keeping clean customer accounts. Much of the success comes from avoiding
duplicate, and redundant product portfolios, as also the dormant or inactive accounts.
Build up the organization’s core skills.
Start a core team of cloud experts, data engineers, and product, finance, and operations experts
who know much about core banking.
Conclusion. Time to Move
Banks haven’t been able to get the most out of their core banking systems for far too long. During
the financial crisis, IT budgets were cut and redirected, and many banks thought that putting core
systems in place was too risky and expensive.
Today, most institutions are again considering replacing and changing their core banking systems.
The old systems at these banks can’t keep up with how quickly their environments are changing,
while new technologies have made core banking implementations less risky and complicated.
Original Source: https://maveric-systems.com/blog/top-5-steps-to-a-successful-core-banking-transformation/