For any bank, core banking systems (CBS) lie at the heart of operations. They play an instrumental role in processing transactions, updating balances, running batch jobs, and interacting with interfaces. But with the advent of disruptive technologies, along with fickle customer preferences and overall regulatory changes, banks now tend to treat CBS as less important. They postpone replacement by investing in local workarounds, quick customizations, and narrow point solutions to save time and cost.
The trouble is that this gradually builds into a complex patchwork of solutions, which become difficult to maintain. Done right, the CBS transformation lifecycle currently has three stages: preparation, execution, and post cut-over. Let's look at the challenges faced and solutions possible for each stage. By analyzing the critical success factors and failures of each, we can combine them to carefully plan and execute seamless core banking transformation initiatives. Here is a roadmap for embracing and embarking on the CBS transformation process.
Preparation: Nine Road Signs and Speed Traps
Execution: Four Green Lights, One Red
Post Cut-Over: The Express Lane to Success
For all the essential punch list items, there exists no set model of CBS transformation. Seamless communication, adequate empowerment, an efficient governance model, and a strong top-management vision of the future will ultimately guide a bank to a success and provide the much needed impetus to future planning. On the way to the checkered flag, CBS could well stand for "clear business strategy".
The article was originally published on www.BAI.org
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