The decision to update your core banking infrastructure isn’t always clear-cut – if it’s worked for decades, why change it?
The problem is your competitors are offering faster, easier services. In addition, the skills needed to maintain your system will become increasingly obsolete, and eventually, your team will no longer have the legacy knowledge it needs to continue operations.
We asked former bankers who have been through this situation multiple times for their advice on creating a strategy. Here’s their insight:
1. Skip bleeding-edge, but be right behind it
Security and trust are paramount. If you mess that up, you risk your business. You can be innovative and cutting-edge without being at the bleeding edge. Don’t lag too far; one step from the bleeding edge can be a great place.
[ Also in this series: 5 digital banking optimizations to consider – and 4 tips to move forward ]
2. Understand your developers
In which business areas do your developers thrive, and where do they want to go? If you don’t know, you risk losing talented staff. Developers can also provide great ideas and technical options that might not be on your radar, especially if they enjoy contributing to open source projects in their free time.
3. Plan, then add more time
You will inevitably encounter delays. Process questions, illnesses, and staff departures can cause delays and disruptions, so be prepared.
4. Adopt the right mindset
A growth mindset is critical. If your team is highly averse to change, the project will be much more challenging and likely not provide the best results. Clarify goals and outcomes so that your teams know their jobs are growing, not being eliminated or minimized.
“I’ve been through five revolutions in my career. I’ve noticed that there are always those people that stay in the previous revolution, and then they remain there,” notes Thomas McGinnis, senior cloud consultant at Red Hat. “Those people will not get you into the next stage.”
5. Don't force a specific technology
Teams can become so loyal to a particular vendor that they don’t see an alternative. Being open to different options, even when that challenges your opinion, can bring better results.
6. Consider the long-timers
Many leaders change roles every three to five years, but individual contributors stay longer. As a leader, consider the employees who will deal with decisions for years to come.
“This mindset will allow the teams to work on long-term projects that bring about success, even if the leaders have moved into another role,” says Kaleem Azhar, hybrid cloud specialist at Red Hat. “It’s a fine balance of demonstrating returns today and leading for the future.”
7. Break down silos
An effective modernization strategy involves input from many groups, along with hands-on efforts. Begin breaking down silos during planning so that every group feels involved and understands the vision. Getting their input early will bring greater buy-in, too.
8. Identify missing knowledge
Before you begin, talk to teams with members who have recently retired or changed roles to identify any skills or knowledge gaps. You might even consider contracting with these former team members as consultants to maximize your legacy knowledge.
“Often, not one person or one group fully understands the entire core as it stands today because of turnover,” says Peter Magnaye, financial services solutions architect at Red Hat. “Gaining as much knowledge as possible will allow you to plan the right sequence of activities that need to happen to be successful.”
9. Be flexible
As you learn, you may need to course-correct. Be open to that possibility, even if it leads to unplanned sunk costs. As you progress through key milestones, review what went well and what didn’t to avoid falling into non-productive patterns.
Updating your core banking infrastructure is not just a technology issue; it also involves people and processes. Throughout your journey, ensure you’ve addressed all three areas.
3 tips for getting started
Prepare for the journey. This isn’t a sprint. Set your teams’ expectations appropriately, with milestones they can hit and celebrate. This will help your team feel successful and keep the momentum moving forward.
Ensure that your team has input from all groups and levels. Without that, you risk missing critical components in your early planning.
Share your goals with your technical partners. That way, they can help you explore new ideas and share solution ideas.
[Want insights on talent and innovation from former financial services IT leaders? Get the ebook: Meet the Bankers.]