The Benefits of a Modern Core
Financial institutions need to be thinking about how to find new sources of growth. While the core may seem ancillary to emerging business models, it’s a critical piece of the puzzle. There are numerous benefits to a modern core. We outline four here.
Faster integration into new third-party products/services
More modern cores built for new business models in banking provide seamless integration into a broader ecosystem. Strong API management capabilities make it easier to govern and de-risk integration efforts. Large libraries of business services exposed as APIs makes integration into another application much easier. Standards make sure that any future changes won’t require unnecessary bespoke efforts.
Better time to market for innovation
Being able to innovate quickly will be the hallmark of successful institutions in the future, and new cores optimize a bank’s ability to bring new products and services to market. Large monolithic cores may require months of work on back-end legacy systems to even implement minor code changes. Component-based configurability and flexibility of more modern cores will be a key enabler as institutions explore more of the possibilities of emerging business models.
Streamlined technology infrastructure and improved time to value
Applications built over decades of complexity are difficult and expensive to maintain. New changes in customer expectations, regulatory requirements, and much more can require IT resources to be locked away trying to work in outdated and inefficient legacy. New, modern cores written in modern programming languages can streamline an IT environment. New deployment models can drastically reduce total cost of ownership (TCO). Bank resources previously tasked with onerous maintenance efforts can instead focus on faster innovation at lower cost.
Future-proofed business agility
Cores with granular building blocks allow an institution to better adapt and change over time. Architecturally, modular, microservices-based platforms let developers work on pieces of functionality and processes in isolation, allowing capabilities to be modernized as needed. Highly customizable, parameterized features around product creation or pricing let banks similarly innovate and meet the needs of customers as they change.
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