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By Ryan Dimick, Chief Product Officer, SMA Technologies
Are you planning to migrate to a new core system soon? If so, you’re in good company. Over 60% of banks are currently transitioning or considering moving to modern cloud-based core banking systems. A mix of factors drives this trend, as many financial institutions (FIs) have postponed their updates for decades.
The present economic environment, marked by high interest rates, is improving profit margins for banks and credit unions, making expensive system upgrades feasible. Moreover, dated on-premise systems, some of which have been used for years, are falling short of today’s consumer expectations, prompting established banks to seek rapid innovation.
This need is intensified by the looming gap in expertise as baby boomers retire, coupled with a scarcity of advanced technical skills in the current job market. Traditional systems are also often inadequate for meeting the growing regulatory demands for updated security measures. As 2024 approaches, the industry is on the brink of a significant shift in core modernization. Compliance pressures are rising, and regulators insist that institutions adopt the latest security and privacy standards, which many legacy core systems are ill-equipped to handle.
Given these hurdles, it’s understandable why many FIs are preparing for core modernization. Yet, before embarking on this journey, a crucial step can ensure success: workload automation and orchestration. Read on to learn what automation offers ahead of core modernization.
Immediate Return on Investment Migrating to a new core system is one of an FI’s most complex, time-intensive, and costly IT projects. It involves various departments, impacting not just IT but also customer service, digital banking, branches, legal, finance, and more. Due to its complexity, these technology integrations often go over time and budget, sometimes by up to 100%. These transitions can take months or even years.
But there’s no need to wait to start gaining operational efficiencies. By delaying, FIs may lose valuable time and resources; a workload automation system can provide significant ROI within months. For example, FIs can automate critical operations, eliminating the need for constant manual oversight and 24/7 IT monitoring. Automation also enhances security, streamlining access control and ensuring all actions are logged for auditing.
Optimize Your Resources Preparing for a core transition requires the expertise of many team members, but not all are needed throughout the process, especially in the early stages. Implementing workload automation early is a more straightforward project that can leverage these individuals’ skills, bringing benefits like cost savings and improved efficiency sooner.
Efficient Integration from the Start Using advanced solutions to automate tasks before beginning the core transition reduces the manual operations that need to be transitioned. This proactive strategy speeds up migration, making the process more efficient with less time and resources required. This also reduces retraining needs, allowing institutions to achieve cost savings and operational efficiencies quickly.
Shorten Training Time Training is a resource-intensive part of a core transition. Each team member must learn the new system, from front-line staff to IT experts. Automating repetitive tasks beforehand can significantly reduce training time, minimizing errors, and streamlining the user experience.
Improve Processes Beyond Core Functions Workload automation isn’t limited to core tasks. It can integrate various scripts into comprehensive workflows, handling technologies from traditional systems to advanced ones like cloud and IoT. It can optimize processes like document management and simplify other IT and business processes, such as data warehousing and AI applications, reducing manual intervention.
Workload automation can tackle various operational challenges, from maintaining business continuity during disruptions to managing complex file transfers.
Phase Your Approach There’s no need to revamp everything at once. A phased, agile approach is advantageous, as core migration requires significant time, resources, and investment. Automating manual tasks in advance can mitigate risks, bring benefits earlier, and lessen team pressures.
For banks and credit unions embarking on digital transformation, workload automation is crucial. It’s a foundational step that ensures a smooth, efficient, and advantageous transition to a new core system.
A Strategic Ally in Digital Transformation
Workload automation is not just a preparatory measure; it’s a cornerstone in the journey toward digital adaptation. It functions as more than a mere tool – it’s a strategic ally in the transition, anchoring every move toward core modernization in efficiency, security, and innovation principles. In an era where digital prowess defines market leadership, workload automation emerges as a critical enabler, allowing FIs to navigate the complexities of modernization with confidence and strategic foresight.
This approach aligns with the current industry paradigm that views digital transformation as not an option but an imperative. Financial institutions are now recognizing that they must leverage technology in ways that were not previously considered to stay competitive and meet evolving customer expectations. Integrating workload automation into their core system upgrade strategies exemplifies this shift towards embracing digital capabilities.
In the fast-evolving world of FIs, modernization is necessary, not just a trend. Financial institutions must be proactive, agile, and forward-thinking at the crossroads of technological progress and increasing consumer demands. The path to core modernization is undoubtedly challenging and laden with potential pitfalls and complexities. However, it’s a path that leads to unmatched growth, efficiency, and customer satisfaction. An FI’s future depends on a robust digital transformation strategy, and the time to embrace this shift is now.
About the Author
Ryan Dimick is the Chief Product Officer at SMA Technologies in Houston, Texas. Throughout his nine-year tenure at SMA, Technologies Ryan has also held positions as Director of Engineering, Director of Cloud Services, Software Architect, Sr Business Consultant, and Chief Technology Officer. He started his career at Corning Credit Union as a user of the OpCon automation platform and held positions in IT Operations and Programming. Outside of work, Ryan loves to be creative in the kitchen by mixing cuisines and creating culinary concoctions with his family. He loves running with his dog, the serenity of growing a garden and producing his food, and his competitive spirit prevents him from saying no to ping pong challengers.
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