This post was previously published in Independent Banker.
Many bankers think that switching to a modern core system is an unnecessary expense. They don’t see enough of the benefits to justify the investment. While bankers in this position tend to feel like they’re dodging a bullet, the truth is that they’re going off misconceptions and assumptions that say modern technology isn’t worth it, when it is. Here are a few common misconceptions that are preventing bankers from shifting to a modern core and holding community banks back from growing their business.
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Misconception 1: Our bank’s current core technology has worked for years; we don’t have to upgrade.
Many bankers have had their core technology for 20+ years. It may be running fine and staff are comfortable using it, but it could also be putting the bank at risk. Older systems are known to be more vulnerable to service disruptions. If your bank falls victim to a cyberattack, it can increase your risk of compliance violations. To make sure your bank is protected, you must have modern technology with built-in securities and work with a provider that continuously keeps your technology updated.
Misconception 2: It’s easier to stay with my bank’s existing technology and provider than to make a switch.
There can be several reservations to switch to a new core: 1.) The bank may feel locked into their contract and can’t cancel without penalty. 2.) The bank is researching new options and the search is too overwhelming. Regardless of where your bank falls, it’s important to consider if your existing core technology and provider are helping your business grow. Not only do you deserve reliable technology that will help move your business forward, but you also need technology that adapts to changes in the environment. On top of that, you need a provider that doesn’t burden you with complex contracts, and instead contributes to your bank’s success.
Misconception 3: Modern core technology is expensive, and we won’t see the ROI.
Your bank can end up paying anywhere from $50 million to $500 million for a core transformation, depending on your needs and provider. Because of this, some community bankers only see the dollar signs and don’t realize all the benefits that modern technology has on their business. Operational efficiency, reduced IT maintenance, and an increase in customer satisfaction all have the potential for paying for the initial investment down the road. When looking at core providers, ensure you’re not distracted by just the bells and whistles and that you can see how the technology benefits your business overall.
Embracing innovation to succeed in community banking:
With customers demanding more digital products and your competition increasing, your bank can’t afford to fall behind the curve because of preconceived notions. To succeed in today’s banking environment, you must let your guard down, embrace innovation, and give modern core technology a chance. Once your mindset is right, work with a core partner that has an impeccable record for service, support, and delivery based on the customer’s needs.
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