Reasons for (and against) end to end core banking transformation

Should you completely transform you core banking platform?  Should you leave your legacy systems intact and build new user interfaces and integration layers on top of them?  Is doing nothing a good strategy?

Perhaps.  I think all of these approaches can be valid depending on the context and the strategy of the organization.

Either way, here are some arguments for and against an end to end core banking transformation program:


  • These projects are extremely challenging requiring an almost zen like focus of the entire organization, ninja’s that double as technicians and architects, fully invested and engaged business stakeholders, and omniscient program management.  Even with all of this, it’s going to be gruelling.
  • These are big investments requiring a clear line of sight on benefits and a view of the strategic advantages of the transformation.  The true transformation benefits require more than just system transformation and these benefits can be elusive.
  • As a major business led initiative, the program will run up against organizational silos and barriers — part of the transformation will require reconsidering some of these structures and boundaries.
  • It is difficult to find good partners, advice, resources, guidance, best practices and leadership on the topic.
  • You may lose friends, your spouse will grow impatient with the constant discussion on the topic, and you may (in extreme cases) even be compelled to write articles in a blog on the topic.


  • Banks can achieve a new level of operational capability and reach new levels of performance by transforming both process and platform.
  • The programs are tough, but the people grow and become stronger.  This is a great opportunity for a team to come together and understand the old and new organization end to end.
  • If the benefits are clearly articulated and a focus is kept on realizing these benefits before, during and after the program they can be attained.
  • Processes, structures, silos, and boundaries will be questioned and some will be left behind in the move to the new reality.  Some of the most powerful changes can be what’s missing rather than what’s been added.  This can be a great opportunity to simplify.
  • It’s an opportunity to learn who your true partners are, who your real friends are, and if you happen to end up chattering away on a blog somewhere about core banking you may find others that are similarly affected.

Whether you are for or against end to end core banking transformation, these are some arguments that you can use to propel your case.  So what do you think.. is it worth it?

8 Responses to Reasons for (and against) end to end core banking transformation

  1. I think end-to-end core banking transformation is like having a heart, lung and liver transplant all at the same time. You should only do it if it is absolutely necessary for the survival and longevity of your organization. And if you do decide to go through with it, you should choose a strategy that allows you to transplant an organ at a time, making sure each successive transplant reconnects with all the other parts. And if you plan to do it, do it with the surgeon that is experienced in doing major surgery such as this, and don’t second guess his advice. I think using this analogy, I would guess that most major banks would not find the risks associated with end-to-end core banking transformation to outweigh the benefits, unless the roadmap was very well planned with conservative risk mitigation strategies and strategic release planning. Regardless, core banking transformation is not for the faint of heart!

  2. Totally agree. If it can be proven that a CORE banking tranfomation is necessary for the long term survival of your organization, then it should be taken on. The points on executive support, proper planning, and finding true experts in this domain are also very valid. Where I am still on the fence is whether a big bang approach is preferred over piece by piece. I think there are arguements for both approaches. Budget, Size, and agility of the organization should play a huge role in determining the right approach. I’m curious to see what people recommend as some of the other factors to consider.

  3. @Phyo Kyi
    Totally agreed. My Project Director has just resigned due to stress after almost 1 year working selecting the “Core Banking solution” .. pressure from the top management .. Now, I’m taking over the PD role … sighh..

  4. The bank also need to consider the integration stratergy with the existing legacy system. The existing interface between the core and non core banking systems like IB, credit card and others need to be taken in to account. The enhanced functionality of the new system should be taken in to account while planning the program. Most banks do need to replace the legacy system as they are outdated in functionality or technology and since the new systems has been added in the last decade, it hinders the performance of the IT in the bank. The core banking need to get transformed but should be done in a phased way to have minimal impact..

  5. There are a lot of ways to go wrong with a core banking transformation, but patching up a 30 year old legacy system would rarely be the right way forward for the future.

    – Benjamin Winegarden

  6. I completely agree, Ben. As challenging as transformation is — without at least a vision and direction the alternative is decay and increased complexity.


  7. Adopting core banking in the words of Stephen Covey is like, “sharpening the axe “. The message that the organization sends out is that we are here to stay and will adapt & adopt new technologies that will help us stay competitive. I quote Pho Khyi comments,”core banking transformation is not for the faint of heart!”. It is for the bravheart.
    Nice summation Kris.


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