‘Invigorating Banking’ survey shows ‘core is crucial’

Breukelen, NL-- After years of focus on the front office, mobile and channel, banks agree that the issue of core banking migration for the benefit of true modernization can no longer be ignored. This is one of the striking results of the ‘Invigorating Banking’ survey, by Dutch FinTech company Five Degrees. The survey, done in co-operation with Finextra, also shows that 65 per cent of the respondents agree that their current core technology no longer supports its needs.

The survey was conducted in the last quarter of 2014 with the aim to identify the need for core banking transformation in order to modernize the banking environment in the current climate of technology advances, regulatory pressure and changing customer behaviour. With 126 responses from 96 financial institutions representing 38 countries, the survey gives a good flavour for the appetite for change, the drivers, drawbacks, customer demand, and the benefit/threat of new entrants.

Modernization into the core

Most poignantly, 65 per cent of the banks agree that the modernization issues can no longer be fixed with ‘skins’ and upgrades of the channel and front end technology. With the rise of API banking, the regulatory push for a more transparent and level playing field, lets banks realize that modernization needs to be taken into the core of the banking infrastructure as well. In terms of drivers most banks agree: 96 per cent want a seamless experience across all channels, 87 per cent aim for self-service, 74 per cent want/need to drive cost down and 63 per cent of the respondents want to prepare their bank for the world of APIs. 64 per cent of banks feel that customers prefer simplicity over a rich user experience and 43 per cent say they find it hard to get boardroom sponsorship for a cumbersome project like core modernization and 40 per cent fell they lacked a strategic modernization plan. Finally only 15 per cent would stick with their current technology provider that did not provide open standard (SOA) technology. 33 per cent stated they would consider working with a new vendor with state of the art technology, even one with fewer references than the incumbent players.