The financial crisis ended up putting some massive IT project on hold. Chances are your plans for a core upgrade were affected. But now that the crisis has waned and the recession has ended–we can only pray that we do not double dip–there is hope for many core conversion projects.
The Aite Group has estimated that approximately 20 percent of U.S. banks “have reached a high level of urgency regarding replacing their core systems,” and that more than half would benefit from a replacement. The bottom line is that you will be hard pressed to offer modern banking services–the type of stuff that will truly differentiate you in the marketplace–if you do not have the right systems in place.
Accenture notes: “Banks that choose to delay transforming their core systems today may come to regret their inaction two or three years from now when their competitors have completed their system modernizations and implemented new capabilities to drive revenues. Banks don’t want to be starting from scratch a few years down the road.”
The issue for many is how to do this. Banks in the past have prided themselves on running the core in house. This was their main IT mission in some ways. But outsourcing has gained ground in recent years. Bank Systems & Technology has noted that more than 80 percent of core upgraded in 2010 were via outsourcers. We can debate the reasons all day. But it’s fair to say the quality of outsourced cores has certainly gone up. But it remains a huge decision.
– here’s the article