Core Banking Transformation: A Roadmap to a Successful Core Banking Product Implementation
During the last few years, banks across the world have turned their attention to the need to replace their legacy core banking systems with solutions that are functionally and technologically superior. The importance of program-managing the transformation is demonstrated by the magnitude of such an investment; The Commonwealth Bank of Australia, for example, recently embarked on a vendor-driven core banking solution to replace its legacy systems, with the total cost of the project estimated at AU$580 million.
The key reasons for banks to move to a new core banking solution are:
- Legacy systems do not allow banks to manage the growth in business. This has become an issue of strategic importance in a merger and acquisition scenario.
- A disparate set of application components undermines the efficiency of the overall solution architecture.
- Loss of competitive advantage.
- Governance, risk and compliance issues.
In the last few years, many banks have forged ahead with replacement projects. A close look into the trend reveals that while some of these projects have failed, the majority have succeeded, albeit with cost overrun and schedule slippages.
This article examines, from a bank’s perspective, the key problems faced during the delivery of a replacement solution and suggests measures for mitigating the associated
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