Intel Report Core Replacement - Flipbook - Page 11
34% of banks picked
challenger banks that
attract consumers among
the top three of their
biggest threats.
43% of banks consider
digital, nonbank business
lenders one of their
greatest competitive
threats.
Source: Bank Director Technology Survey 2021, banks in asset sizes of $1 billion to $10 billion
that allows customers access to the tool through the bank’s platform. Bank Director’s Technology
Survey found that 63% of community and regional bank leaders said their institution uses APIs.
This can create access to capabilities, like analysis of customer spending, for example, without
having to build the technology internally. While most banks utilize APIs, it doesn’t mean that most
banks can incorporate the technology easily, quickly, cheaply or effectively.
If the current core doesn’t have the ability to add APIs or it requires significant effort and months
of planning to connect with specific tools, then it might mean you need to “increase the responsiveness of the platform so it’s less complex,” says Andrew Beatty, senior vice president and general
manager of next generation banking at core provider Fidelity National Information Services (FIS).
3. IT Costs
Rising IT costs can also push a bank to upgrade. Maintenance costs on old core infrastructure grow
as the number of upgrades increase within a system. Therefore, the older the system, the higher
the maintenance costs. When it becomes prohibitive to afford additional upgrades, then it becomes
another issue that the bank will face.
4. Talent Dearth
There’s also a simple matter of experts in the original core retiring or aging out of the workforce. If
the institution no longer can find much talent that can speak the core’s operating language, then it
faces a significant hurdle to upgrade systems.
CORE REPLACEMENT: HOW BANKS ARE REPLACING THEIR CORES | 9