Blog Future Proof

Future Proof Your Core

Jean Donnelly and Darryl Demos

As mentioned in the Forbes article, “The Banking Crisis Has Only Just Begun”, Ron Shevlin refers to core providers as “Zombies” implying they are getting in the way of digital transformation. And while we all know that there is a lot of finger pointing at core providers for not always meeting your service and/or product expectations, the prospect of a core conversion is absolutely terrifying. :scream:  Undertaking a core conversion can take years and won’t along the way add any benefits for the bank or its clients and, once completed, may still not provide the expected benefits.

Our conversations with our over 100 bank and credit union customers indicate that core conversion often won’t solve your issues and can even slow you down further on your path toward digital adoption, fintech and or BaaS integrations. 

Shevlin also referred to integration platforms like Sandbox Banking that can make it easier to connect ancillary systems to enable a core optimization road map to future proof your investment. 

What are the various options, which can be pursued individually or collectively to future proof your core: 

Option 1: Efficiency and Compliance 

Use all your cores APIs. Get the most value out of your existing core by using existing core middleware to its fullest and staying focused on automating human intervention to reduce costs and or improve compliance and control. The issue is that we know the API deployments are not comprehensive or seamless yet. Industry specialist integration platforms like Sandbox Banking’s Glyue or other low code integration tools, provide field-mapping data and business rules templates that cover middleware data from over 95% of all North American core banking systems.

Option 2: Expand Customer Choice and Bank Revenues 

Connect core APIs to modern digital transformation tools eg. originate corporate deposits online, chatbots for employee voicemail enable banks and credit unions to offer better customer service, more products leading to  more fee revenue and customer retention. By integrating cutting-edge fintechs with existing core banking systems, institutions can unlock new levels of efficiency, customer-centricity, and innovation. Interoperability enables real-time data sharing, enhanced analytics, and streamlined origination and servicing processes, empowering banks and credit unions to offer personalized financial solutions to their customers. Again, industry oriented companies like Sandbox Banking are building adapters to fintechs and enterprise software providers that serve the bank and credit union industry.

Option 3: Enable Business Transformation

Your cores just can’t do some things; bitcoin/international payments/merchant acquisition. In fact,the core providers know this and are focused on expanding their ecosystem to enable providers to fill in their gaps. In certain cases a multi-core or hybrid-core strategy can make begrudging sense. The Glyue platform can help keep things in sync between multiple cores or other downstream systems.

Option 4: Mandatory Conversion

If you have come to the determination that switching cores is your only option (eg your core is being sunset or your bank is merging or being acquired) companies like Sandbox Banking are able to facilitate your migration to move over to other cores without losing existing digital services. A robust library of core and fintech vendor templates, adapters and familiarity with the internal operations of all core systems can radically improve cost, timing and control over a migrations. 

One last point that is reflected throughout the options above; there are 2 kinds of integrators in this space – industry (vertical specialists) or industry agnostic (horizontal specialists). A vertical specialist like Sandbox Banking’s Glyue focus on specific banking data and systems to improve speed, control and predictability of sophisticated digital transformation without the need for large engineering and IT departments. Industry agnostic vendors are excellent too but they are built to serve many kinds of companies so their functionality is more generic, requiring more customization and are usually suited for organizations with large IT, engineering and program management teams.