The new year means new technology changes are just around the corner. As a banker, your core technology partner and the software they offer need to be positioned and forward thinking, so it can move with the wave and continue offering you technology that keeps you competitive. Let’s face it. Underperforming, deprecating core systems are no longer meeting your needs nor expectations, and a transition may be inevitable. The best laid plans involve evaluating your options for the long-term.
But, how do you start the evaluation process? If your core provider and system are no longer meeting your expectations, then you may think that a new provider should be the opposite of what your existing provider is not. However, it’s much more complex than that. Before jumping in, it’s important to know that bigger or newer aren’t always better for your business in the long run. Here are a few considerations when you start shopping around.
3 Considerations When Implementing a New Core System
- Choose a strategic partner as opposed to a “big box” vendor. When evaluating core system providers, one of the first inclinations is to start with the biggest players in the space. But, is that your best option? Bank leadership should begin by evaluating their goals of a core system conversion and identify providers that align with those needs. Smaller or more niche core providers could provide a financial institution with features such as increased flexibility, more accessible support, and product features that better synchronize with the institution’s goals.
- Ensure the core system integrates easily with other systems. The industry is changing. Ancillary partners and providers are creating and developing tools, programs, and services that enhance the banking experience for both the customer and the financial institution, companies like Abrigo, Deluxe, and Kasasa. As fintech companies continue to expand into additional areas, their role will become increasingly more important in the financial services industry. These ancillary service and software providers allow community banks to offer the same services and functionality that larger FI's are offering.
When evaluating core providers, assess their level of integration with your current third-party service providers, and inquire about the ease, cost and timeline of integration. The days of legacy and proprietary formats are numbered. Strive to find a core that allows for flexibility and timely connectivity with a variety of ancillary software vendors to make the most of your relationship..
- Explore “all-in” vs multiple providers. Many large, big-box core providers provide an option to interface their product offerings. This has advantages for organizations that have arrived at their current core system through a series of mergers and acquisitions, or smaller updates. The downside is that very few "interfaced" products provide true integration.
In partnering with a provider who is truly integrated, a financial institution can gain more by having one access point to a consolidated view of information. This may be seem to be disruptive in the short term, but it is likely to deliver greater benefits over time, including:
- Lower maintenance costs
- Ease of operation
- Cost savings
- Better data quality
- Integrated reporting across the entire business
The benefits of changing to a more integrated, "all-in" system are substantial for a bank. The longer the wait in deciding to separate from a broken core system, the higher the security risk and financial loss.
If you're concerned with the cost of transitioning to new technology, you should consider how much you're paying to stay on old technology.
Consider IBT Apps’ i2Core processing system for your core needs in 2020 and beyond. This community banker’s total solution transforms your bank operations to promote revenue growth, and improve operations and efficiency for your customers. Let’s work together to adopt a core solution that works for your bank’s needs, keeps you level on the playing field, and, best of all, exceeds your customer’s expectations. Schedule a consultation today!