Core banking transformation is kicking up a storm across the globe. With technology changing rapidly, Core Banking System renewal, which earlier was done once in every six to eight years, is becoming more frequent and considered the need of the hour.
Core banking transformation is, of course, a complex procedure. Successful transformation considers the fundamental elements of people, culture and change management. A range of external factors compound the task of acclimating these vital mechanisms; today’s progressing regulatory environment, eccentric and disruptive industry novices, and ever-tighter operating margins.
Core banking transformation either replaces, upgrades or outsources a bank’s CBS (which is made up of integrated software applications), the backbone of a bank’s IT infrastructure. Core system transformation can bring in critical changes like smarter banking, lower costs and higher revenues.
The core banking solutions that have been technologically advanced in the last decade have mainly focussed on getting digital channels together along with increasing scalability and flexibility. With the new age of core banking solutions in the market, it will become easier for banks to bring in different products and adapt to new customer expectations faster. This is crucial nowadays as banks face their own challenges trying to tackle social networking, mobile, cloud, and collaborative technologies.
A lot of banks are taking the help of technology to balance cost cutting with smart revenue growth. They intend to transform their core banking platforms which would help reduce back office expenses, and also expand and improve their customer relationships, creating opportunities for new revenue streams. A whole lot of leading financial institutions are in the process of continuous core upgrades to prioritise their customers’ needs, which would help in increasing cross-selling and up-selling of products. Here, product offerings are customised to specific customer profiles and needs, and the sales team is supported by advanced customer relationship management tools. These banks also have a unique pricing model which is based on both the customer’s profitability and profile and a fee model which is linked to value-added services.
Given the amount of internal factors and external pressures involved, transformation demands support from a partner with a proven record of strategy excellence and flawless execution. That partner must be one you trust to be independent and impartial in technology recommendation and passionate about delivery.
However, core banking transformation improves competitiveness by enabling banks to time to market for new innovative products which increases market share and provides an edge over competitors.
The above data used on the basis of the non-financial transactions/usage provides very useful insight to decide on the most crucial outcome of credit scoring; should the credit be extended or not. It can be even more useful if it is complimented with financial data. The combined effect of the two is sure going to change the way credits are offered, very soon. And we can conclude saying that “All data is credit data”.