Four out of five banks believe they will have to replace their core banking system in the next three to five years, with nearly 90% in favour of including SaaS or cloud based services as part of the infrastructure, according to a new survey of senior bank executives.
In the report, Invigorating Banking, sponsored by fintech firm Five Degrees and carried out by Finextra Research, the results revealed strong support for core system replacement and renovation. Some 83% of respondents believe their bank’s existing core technology can no longer support its needs. A further 89% believe that it is inevitable that banks rapidly modernise processes and IT to avoid losing market share.
“You cannot become a digital bank without core systems renewal; you cannot renew core systems without using cloud for data management; you need to consolidate data in the cloud to be able to perform effective data analytics; and when you’ve renewed core systems through the cloud to perform data analytics, then you can innovate,” said Chris Skinner, report contributor and independent financial consultant.
Many banks planned to respond by working with new technology providers, even where these have fewer customer references, so that the bank can ensure that it implements standard serviece oriented architecture (66%). A slim majority of banks still believe that IT is a unique selling point and will continue to rely on their own in-house development teams for niche technology that fits the bank’s strategy (61%). However, banks were split down the middle on whether to stick with their current technology provider, following its migration and upgrade process even if it would not provide the benefits of newer SOA technology (50% versus 50%).
Read the full article here at Bankingtech.com