Intel Report Core Replacement - Flipbook - Page 8
THE SURGICAL OPTION
If the leadership of the bank makes up the brain, and
bank adds a new appendage with a dedicated new core to
employees the different appendages, then the core serves as
operate it. For instance, an institution may use a new core
the spinal cord, both connecting and moving the entire orga-
to add a virtual bank or commercial deposits separate from
nization. It provides the ability for data to flow, allows for
the organization. Often, in such complementary or split-core
consumer-facing products to function, gives leaders insights
designs, the main bank will slowly move more of its opera-
to develop new strategies and — when running optimally —
tions to the new core over time.
allows different segments of the bank to interact and talk
with each other. Under this analogy, going forward with a
core conversion likens to a spinal replacement surgery. In a
full core conversion, it’s essentially replacing the entire spine
of the bank with a new one, which allows the bank to compete fully with fintechs for modern banking services.
Some banks have also turned to split-core conversions where
they replace a piece of the spine to allow the organization
to implement modern upgrades, even if the rest of the core
When moving forward with a partial, complementary core
upgrade or full core replacement, you have to figure out how
to replace the spine “in a way that doesn’t break the organization,” says Bryan Jordan, CEO of First Horizon.
With the level of precision required in a core conversion, it’s
understandable why bank leaders hesitate before moving forward. If it goes sideways, it can cost leaders their jobs.
What can go sideways? A lot.
can’t operate with the same capabilities. In some cases, the
The Surgical Option
When banks decide to replace the core, the level of prep will depend on the
significance of the surgery.
The Split-Conversion:
The Full Conversion:
Amputating part of the
Replacing the spine
spine, replacing it with
can give banks added
new bones, adds flexibility
flexibility, but the risks
in the part of the bank
are higher.
where the new core
runs but not complete
flexibility to the bank.
6 | FINXTECH INTELLIGENCE REPORT
POWERED BY BANK DIRECTOR