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EY-FIS alliance

Five rules of core modernization success

How an effective transformation roadmap drives incremental value and catalyzes future innovation.

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When many banking executives think of major technology implementations and upgrades, their first thought is of multiyear projects that consume huge amounts of time, resources and management energy. Even when it’s clear that core legacy systems must be replaced, many senior leaders are reluctant to move forward because many past projects failed to deliver the expected returns. 

A certain degree of skepticism is understandable. But today’s advanced, composable architectures and cloud-based systems present much less risk than yesterday’s monolithic packages, which required multiyear, “big-dig” implementations. In fact, the combination of modern platforms and proven integration techniques enables banks to realize value much faster and progressively over ongoing modernization cycles.

Why modernize? Why now? 

Modernization of core systems is necessary because most banks face a considerable gap between what they want to deliver for their customers and what their legacy systems allow them to deliver. The objectives include personalizing experiences, establishing strong sales and services capabilities across multiple channels and connecting to existing systems and external partners. 

Steadily increasing maintenance costs for legacy systems add to the urgency for change. There are other hidden costs – expensive workarounds to support basic functionality, elevated regulatory costs (because of manual data gathering and reporting processes) and increased M&A costs (because integration is so difficult). Banks that put off modernization often end up spending more to sustain outdated technology even as it falls further behind in its ability to meet market demands.

Five rules that lead to core modernization success:

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