How your core banking strategy can transform your customers' experience

February 04, 2025

When a potential customer shops for a bank, they may visit your website or stop by a branch looking for information about how your offerings can help them manage their money when it is at rest in a deposit account, moving through the payments system or hard at work in an investment vehicle. The one question they won’t ask is, “What core banking system do you use?”

Why? Because they don’t care. What they care about are competitive products that are easy to access online, from their mobile device, in the branch or by phone. And that experience must be seamless, consistent and fast.

Table stakes – An omnichannel experience

Delivering a seamless, consistent, fast customer experience is no longer just nice to have; it is an expectation.

From the technology perspective, it means your core system must be able to deliver the right data to the right channel for the right purpose. Try as you might, you can’t get your big, monolithic mainframe to handle tasks like optimizing the customer’s mobile experience, for example: It is not nimble or flexible enough.

Core modernization is all about simplification, that is, relieving your mainframe of those extra duties so it can focus on what it does best: processing transactions. The channel then decides what data it needs at any given time and how it is going to use it to best serve the customer. That’s where differentiation happens: in the channel where the customer lives and breathes and makes judgments about your service.

The many faces of your customer

In your legacy systems, you may have Jennifer the checking customer, Jennifer with the home equity loan, Jennifer who opened an investment account and Jennifer who just rolled over a certificate of deposit. That’s four different Jennifers living alone in four different silos.

Core modernization brings all the Jennifers together, providing every channel with one consistent view that gives your bankers a new perspective of their overall financial needs. In decades past, banks attempted to accomplish the switchover in one big conversion, and the stories of chaos and failure are legendary. But technology has evolved. Today, you can modernize your bank by progressively migrating your systems one by one, over time, giving you tight control over budget and risk.

As your modernization continues, everything Jennifer does becomes an event that is recorded in the cord. When she cashes a check or makes a payment on her loan, each event becomes available not only to Jennifer the customer, but to every bank representative no matter where they sit in your organization.

Employees are stakeholders, too

Any discussion of core modernization turns quickly to the customer and their positive or negative interactions with various virtual or in-person touchpoints. What is often left out of the conversation is the employee experience. On your journey to gain efficiency and lower costs by moving to the cloud, digitalizing your bank and harnessing data, it is important that you factor in the impacts to your associates – the valuable human beings who nurture relationships with your customers and always keep the front, middle and back offices humming.

Banks that have demonstrated the most success in transforming their business recognize that operating with a traditional infrastructure differs dramatically from cloud computing. Processes are going to change, and you must put serious effort into elevating the skillsets of your workforce through communications and training. Lowering costs is great, but you can’t just design technology. You must design technology for humans.

Three goals for the newly modernized bank

According to the 2024 FIS® Global Innovation Research, organizations currently utilizing core processing systems have three primary goals that relate to strengthening their competitiveness, security and customer relationships.

First, nearly half the respondents (46%) wish to enhance their competitiveness by staying ahead of market trends.¹As your journey toward modernization continues, digitalization plays an important role in achieving this.

The traditional definition of digital is typically limited to the front-end user interface that enables customers to perform basic financial activities, such as logging in to take care of transactions, moving money between accounts, making payments and the like.

But the definition of digital must more broadly encompass connectivity of the systems that power the movement of data between a core account and the front-end digital experience.

Your core modernization strategy must address these core-to-channel connections if you wish to create a highly personalized experience for each customer. Ask yourself how you might take a fresh approach to personal financial management features that help that customer understand their spending, which is different than any other customer’s spending. Or maybe as data is passed from core to channel, you can find an innovative spin on cross-selling accounts to help each individual customer’s money work harder for them.

As for the Global Innovation Research respondents’ secondary goal, 44% said they depend on their core processing system to protect their business by strengthening cybersecurity and ensuring compliance with regulation.¹ Nefarious actors are deploying new tools to exploit any weakness, and you must formulate an aggressive strategy, complete with accountable executives supported by dedicated teams. It requires a realistic, ongoing investment in better channel-specific authentication tools to prevent crime at the point of entry. To be sure, it is a lot more expensive to clean up the breach after it has already happened.

Finally, as the third goal for their core processing system, 42% of Global Innovation Research respondents cited the need to deepen customer relationships by improving the overall customer experience.¹ Your core system houses a wealth of information that’s full of clues on how to do just that. An important part of your core modernization is to become rigorous about harnessing the power of artificial intelligence, machine learning and data analytics to surface those clues, transform them into meaningful insights and use them to strengthen customer ties.

How can banks differentiate themselves from their competitors?

New technology will continue to emerge, presenting different challenges and risks. Melissa Cullen, SVP, Core Banking Solutions, FIS, gives her recommendations on how you can stay ahead.

A solid nucleus for modern banking

Your core banking system lies at the heart of your ability to efficiently and securely manage money as it journeys through the global economy. By unbundling and digitalizing it in a modular fashion on your own timetable, it becomes the center of a fully connected, secure ecosystem that empowers you to compete at a higher level and elevate the full banking experience for your customers.

¹FIS, Global Innovation Research 2024 surveyed 2,000 firms across financial services and other industries in the U.S., U.K., Singapore, Hong Kong and Australia.