Vendors that underestimate the value that banking executives place on a trusted and lasting service can expect to get left behind in the big banking SaaS bang.
Banking executives “get” SaaS. They understand that the digital revolution has made consumers more demanding and that SaaS is the best way to give people and businesses banking on their terms. They understand the benefits of moving from a Capex to Opex spending model. They know that cloud services make innovation and scalability easier. They’ve seen the data around productivity gains. They’d love to redeploy IT resources to core banking activities.
The big obstacle for banking executives is risk. More specifically, personal risk.
Nobody ever got in trouble for playing it safe; and in this case, playing it safe means sticking with the legacy core IT that has served the bank just fine for many years. Ripping out what you have is not to be undertaken lightly. Alongside decades worth of complex technical wiring and integrations that must be unravelled and reset, there is the data that must be preserved, and the business users who will need to learn a new system from scratch.
We are not talking about a supporting system. Get an HR, procurement or communications software implementation wrong, and it’s inconvenient. Get it wrong with core banking, and it is catastrophic for potentially millions of customers. When it comes to migrating core banking software, you cannot roll with the punches and just apologise away unscheduled downtime.
Executives are not just thinking about their professional reputation. In many jurisdictions around the world, executives at banks and other financial institutions are personally liable, including financially, for taking decisions which cause the institution to fail or puts the organisation at unnecessary risk.
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