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Fintech has taken the banking industry by storm. The influx of innovative technologies, cloud banking, and sophisticated processes have led the traditional and incumbent banks to rethink and realign their way of operating. Fueled by the 2020 pandemic, there is a growing need for the modernization of core banking systems to support the ‘new normal’. The modern core banking systems require better agility, flexibility, and scalability to respond to evolving customer demands. Traditional banks have pushed themselves to meet the inherent capabilities of the new normal. To remain competitive, the future of successful enterprises relies on modernizing core banking systems.
Ensuring business continuity by embracing internet banking, in all its glory, is just a small and hurried step toward digitization. But to add value to the digital revolution, enterprises will require a long-term vision, strategy, and approach for the systemic migration and adoption of advanced technologies. The biggest challenge for banks is overcoming the limitations of legacy systems in a microservices-era.
Before we address the need for an expert service provider for a successful transformation to advanced digital systems, it is imperative to comprehend the key features of modern core banking along with its benefits.
Why Banks Need to Modernize Their Legacy Systems?
Core transformation can no longer be ignored by financial institutions that are still reliant on legacy systems. While the high costs of transformation have held back most organizations, the benefits of legacy modernization far outweigh them. Common motivations for legacy modernization include:
The Big Question: How to Modernize Core Banking?
Addressing the challenges of the near future and the next normal would require a thorough assessment of the current core banking platform and external environments. Modernizing requires a disciplined and well-thought approach. Banks will need to understand whether a full replacement or a systematic upgrade will offer a better value-to-risk ratio.
Core banking modernization best practices
Conclusion
As the world adjusts to the new normal, the solution to legacy systems is the modernization of core banking systems. Banks looking to enhance their IT efficiency are turning to innovative technologies of AI/ML, cloud computing, and the internet of things (IoT). The integration of new technologies unlocks the growth and revenue potentials of banks while building a loyal and satisfied customer base. It also enables real-time systems that are agile, scalable, flexible, and cost-effective.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Nikunj Gundaniya Product manager at Digipay.guru
14 October
11 October
Priyam Ganguly Data Analyst at Hanwha Q cells America Inc
Fang Yu Co-Founder and Chief Product Officer at DataVisor
09 October
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