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The 4 C's of core banking - part 4

Here’s the final installment of the 4 C’s of core banking. 

Finding the best way to tackle legacy core systems has re-emerged as a key topic of debate among banks, from top tier global players to smaller, domestic institutions. With their vast, fragmented architectures, banks’ legacy systems are typically cumbersome and lack the agility required to adapt to today’s business and market needs. Factors such as evolving customer expectations, new regulations and the need to enter new geographies or launch new products require banks to have flexible systems that can continually adapt to support their evolving business needs.

With legacy systems so far having failed to address these changing requirements, banks should consider four crucial aspects to make their core banking systems more efficient this year: componentisation, going back to the core, compliance and customer centricity.

So let’s continue with the final C: customer centricity.

As the industry emerges from the economic crisis, many banks are aware of the fact that there is a need to re-establish trust and customer confidence in their services. Following the risk-friendly and somewhat greedy years of the 2000s, customers now need to be put back at the heart of a bank’s strategy to ensure they remain competitive in an ever more crowded market place.

As banks look to refresh their overall core banking infrastructure, they must also look to store information at every level of detail in relation to all customer activities across the bank and then link this back to the account portfolio to gain a single customer view. What’s more, the multiplication of channels, such as mobile or social media platforms, is making matters even more complex and a comprehensive and cross-channel customer view is therefore becoming increasingly important.

An outdated or fragmented core system prevents banks from achieving a single view of each customer portfolio, creating an obstacle for the front office to manage their customers and maximise revenues. In addition, the banks are then faced with a high cost of ownership and high risk due to inconsistencies across the IT infrastructure due to an accumulation of multiple systems. As such, banks must be fully equipped with the appropriate information to be able to manage and up-sell across multiple channels.

To conclude, a lot seems to be changing in 2011 in the banking space with new payment channels, such as mobile, gaining in popularity the implementation of SEPA finally becoming a reality. In order for banks to deal with these changes and many more, a flexible and modular banking system will be the key to financial institutions coping with the challenges before them and capitalising on the business opportunities that also exist.

If you missed the earlier parts, you can find them here: componentisation, going back to the core and compliance.


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