Before Replacing Tech, Fix the Process It Serves

Most banks have spent years and a lot of capital building around the core. Even so, executive teams tend to carry a list of things they still can’t do well. When that happens, the reaction might be to find new technology. However, replacing a core system is a significant undertaking, and even after a complex conversion, banks often find that many of the same frustrations persist.

Technology is seldom the real constraint. More often, the problem sits in the processes behind the systems. A more useful starting point is to identify which process is causing friction for customers or employees and which systems that process touches. Processes can be fixed, and once they are, technology can help a bank get real value without disrupting customers.

How Tech Is Like an Airport
Imagine your systems as an airport to understand why replacing one doesn’t require replacing the rest.

• Core banking is air traffic control, and everything else is built to connect to that core. Nobody replaces air traffic control casually because it’s the foundation for the rest of the stack.
• Account opening and loan origination are the ticket counter, where a new customer begins a relationship with the bank. Any manual step a system requires is a place a customer can get frustrated and walk away in the middle of an application.
• Digital banking, the everyday mobile and online banking app, is the terminal. This is the ongoing experience for a customer who already has an account. Any task a customer can start online but can’t finish there — like a transfer, dispute or card change — is a sign the process behind the app needs work.
• The feed from the core to the general ledger is the flight manifest. It translates what happens at the core into entries the finance team can book. At many banks, this is built into the core. If the feed isn’t updated when a new origination platform goes live, the books won’t tie at month-end close. This is the risk most overlooked during vendor selection, and it’s the one that generates emergency calls to the finance team after a platform goes live.
• The data layer is the flight operations center. It aggregates everything happening across the bank, so leadership can see how the operation is running.

Any piece of this stack, outside of the core, can be easily replaced. What matters is understanding how a change affects all other parts of the stack and how every part, without exception, must tie back cleanly to the core.

Where Friction Lives
Customers don’t interact with just one system, and when banks trace where work slows down, the trouble usually turns up between systems rather than inside them. The gaps come from processes that no single team owns.

Before committing to a new platform, leadership teams can ask a few diagnostic questions:

• Where do customers or employees wait, and what are they waiting for? At what points do customers abandon an application or call for help?
• Where does work or data get handed off between systems or between people?
• Which steps are still manual, and is there a reason for that?
• Which downstream systems, particularly accounting and reporting, would changes to the platform touch?
• If the technology worked perfectly tomorrow, would the process still produce the same outcome?

The answers frequently lead to targeted fixes, such as a new integration, an automated workflow or updated rules in an existing system. These changes usually are less disruptive than a replacement, and they can still lead to improvements.

Start With the Process
An IT strategy road map gives leadership a structured way to track processes from end to end, identifying the processes that create the most friction, prioritizing them based on their effect on customers and operations, and matching each to the technology that can offer improvement. Sometimes the fix is a tool the bank already owns, sometimes it is a targeted addition and occasionally it is a replacement. A good road map also sequences the work, so the ticket counter, terminal and flight manifest stay aligned with the control tower while customers go about their business.

Banks that treat their challenges as process problems first are generally better positioned to make focused technology decisions and to spend deliberately. It can be helpful to work with a team that has deep experience assisting banks in building IT strategy road maps that tie process improvement to the technology that supports it.