The decision to update your core banking infrastructure isn’t always clear – if it’s been working for decades, why change it?
The problem is that your competitors offer faster and easier services. Additionally, the skills needed to maintain your system will become increasingly obsolete, and eventually your team will no longer have the legacy knowledge they need to continue their operations.
We asked former bankers who have been through this many times for their thoughts on creating a strategy. Here is their view:
1. Go to the cutting edge of technology, but be right behind
Security and trust are paramount. If you are wrong, you are risking your business. You can be innovative and cutting edge without being cutting edge. Don’t drag too far; one step from the bleeding edge can be a great place.
[ Also in this series: 5 digital banking optimizations to consider – and 4 tips to move forward ]
2. Understand your developers
What areas of business do your developers thrive in and where do they want to go? If you don’t know, you risk losing talented staff. Developers can also provide great ideas and technical options that might not be on your radar, especially if they like contributing to open source projects in their spare time.
3. Plan, then add more time
You will inevitably encounter delays. Process issues, illnesses and staff departures can lead to delays and disruptions, so be prepared.
4. Adopt the right mindset
A growth mindset is essential. If your team is very averse to change, the project will be much more difficult and probably won’t deliver the best results. Clarify goals and outcomes so your teams know their tasks are growing and not being cut or minimized.
“I have experienced five revolutions in my career. I’ve noticed that there are always these people who stay in the previous revolution, and then they stay there,” notes Thomas McGinnis, senior cloud consultant at Red Hat. “These people won’t take you to the next step.”
5. Don’t force a specific technology
Teams can become so loyal to a particular vendor that they see no alternative. Being open to different options, even if it challenges your opinion, can bring better results.
Being open to different options, even if it challenges your opinion, can bring better results.
6. Consider longtime people
Many leaders change roles every three to five years, but individual contributors stay longer. As a leader, consider the employees who will have to make decisions for years to come.
“This mindset will allow teams to work on long-term projects that will deliver success, even if leaders have changed roles,” said Kaleem Azhar, hybrid cloud specialist at Red Hat. “It’s a good balance between demonstrating returns today and leading for the future.”
7. Break down silos
An effective modernization strategy involves input from many groups, as well as hands-on efforts. Start breaking down silos when planning so that every group feels involved and understands the vision. Getting their input early will also bring greater buy-in.
8. Identify missing knowledge
Before you begin, talk to teams whose members have recently retired or changed roles to identify any skills or knowledge gaps. You might even consider contracting these former team members as consultants to maximize your legacy knowledge.
“Often, not one person or group fully understands the entire core as it stands today due to turnover,” says Peter Magnaye, financial services solutions architect at Red Hat. “Gaining as much knowledge as possible will allow you to plan the correct sequence of activities that need to occur to be successful.”
9. Be flexible
As you learn, you may need to correct the course. Be open to this possibility, even if it involves unforeseen sunk costs. As you progress through the milestones, review what went well and what didn’t to avoid falling into unproductive patterns.
Updating your core banking infrastructure isn’t just about technology; it also involves people and processes. Throughout your journey, make sure you’ve covered all three areas.
3 tips for getting started
Get ready for the trip. It’s not a sprint. Set expectations for your teams appropriately, with milestones they can achieve and celebrate. This will help your team feel successful and maintain forward momentum.
Make sure your team benefits from input from all groups and levels. Without it, you risk missing critical components in your initial planning.
Share your goals with your technical partners. This way they can help you explore new ideas and share ideas for solutions.
[Want insights on talent and innovation from former financial services IT leaders? Get the ebook: Meet the Bankers.]