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Founder at Fintech Wrap Up | Payments | Embedded Finance | Wallets

Core banking options - how to future-proof Ultimately, no bank wants to keep replacing its core system. The existing one may have been in place for several decades and the new one, ideally, will also have a long lifespan. That means looking towards the new generation, with much more modern and flexible designs, rather than the traditional players. Tried and tested or next generation? At first glance, it might look like the trade-off is to go with either a core replacement that is narrow and modern or one that is broad, deep and ageing. However, if the former can move at an acceptable pace in terms of adding both breadth and depth, the user gains the best of both worlds. Important considerations are: • Does that supplier’s vision align with that of the bank; • Does it have strong banking domain knowledge; • Can its senior management articulate its core values and direction; • And how committed will it be to make a success of the implementation and build a long-lasting relationship? If, for instance, a current modern offering has the bulk of the retail banking functionality but is missing commercial lending, will the latter be available within an acceptable timescale? The implementation could start with retail banking, adding commercial lending at a later stage. A benefit to this approach is that the user can help to influence new functionality and the priority of what’s delivered. As one of a relatively small number of users, its voice will be much louder than if it selects a long-standing incumbent provider. Has the provider chosen any proprietary tools, for instance, that will tie the system to a particular cloud platform? Many of the old core systems ended up on obsolete technology platforms and databases. Is there this risk even with newer providers? Poor choices at the outset can mean that a system is too tightly tied to a particular technology stack. That sort of tech-savvy due diligence can also flow into questions about life after go-live. If the technical architecture is sound, then there should not be a need for the major upgrade projects of previous eras. The platforms should be able to be moved forward via small, incremental steps that are far more seamless than in the past in terms of testing and releasing new features. In a cloud native environment, this becomes standard practice, with all new functionality made available to all users at the same time. This in turn brings reduced maintenance and support overheads and economies of scale, resulting in a cost-benefit for customers as well. Subscribe for more insights https://lnkd.in/d94JgWBU Source Tuum #corebanking #banking #fintech

Eugene Krasicki

| CEO and Founder at Keytom neobank

10mo

Sam Boboev, It's vital that the core banking system is aligned with the bank's long-term strategic goals. This alignment ensures that the chosen technology will support the bank's growth, adaptation to market changes and innovation ambitions without requiring frequent and costly replacements.

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