Intel Report Core Replacement - Flipbook - Page 20
THE TOTAL SCOPE: HOW BANKS ACHIEVE A
FULL-CORE REPLACEMENT
PART ONE:
Developing the Strategy
When Seattle Bank looked at the idea of replacing its core, it weighed many different options.
First, it considered whether it truly needed to replace the core. “There’s no reason to change
cores without a real purpose,” says Callies, Seattle’s CIO. “There has to be a strategic plan to
do it and why you’re doing it.”
Seattle believed that they had no choice while adapting to the open banking trends. It sought
to provide customers with more digital offerings, like enhanced bill pay or turning access to a
debit card on or off via the mobile app. But its goals went further. It wanted to offer bankingas-a-service (BaaS), where other organizations use the bank’s compliance program, access
to payment rails or deposit insurance to offer banking services. Say a gas company wants to
encourage buyers to use its gas, so it offers a loyalty card. Or a home design organization wants
to provide low-interest loans for renovations.
Seattle saw BaaS as the future, particularly in embedded finance, where websites include different payment options (like buy now, pay later) or other financial payment methods. A bank like
Seattle felt it could potentially aid companies in their embedded finance aspirations.
PART TWO:
Selecting a Vendor
With those goals in mind, next Seattle needed to select a vendor. Staff spoke with several companies, but the bank ended up going with Finastra due to its open banking tools. It avoided a
split-core design because the offerings wouldn’t allow Seattle to incorporate some of the commercial and private banking tools it sought to add.
But it also had to do with timing, says Callies. With their contract with a large core provider
ending, the bank decided that it made more sense to take the leap and go through a full replacement. To go through a split-core design, it would need to re-sign a contract with another core
provider for the rest of the organization, which could cause issues down the line when the bank
wanted to end the contract.
18 | FINXTECH INTELLIGENCE REPORT
POWERED BY BANK DIRECTOR