As neobanks, big tech firms, and fintechs use technological innovation to set new standards, many banks are still grappling with outdated systems. To stay competitive, they must move to modern, cloud-native platforms while leveraging their rich history and customer trust. 

Hundreds of years of history reside in our banks, lending them a cachet that few young businesses can match. Very often though, these banks are run on technology that’s ageing significantly, which is far less desirable. On average, incumbent banks depend on technology that is five times older than that of digital challengers.

According to American Banker, cloud migration was a top priority for 2023 among 40 percent of banking executives. However, experience shows that banks are often not happy with the outcomes of their digital migration projects. That can have a negative effect on those considering change, but banks should not be put off.

Managed effectively, and a core to cloud migration unlocks new opportunities for banks. Of course, careful planning is required because the legacy technology that banks rely on is complex, built up over decades of additions and changes. Replacing it all at once is not an option, but for the incumbents to maintain their status, adopting cloud-native banking platforms is a pivotal challenge.

For more detailed info on core banking migration, get a copy of our whitepaper: Making Sense of Cloud-Native Core Banking Migration.

1. Adapting to a new age of customer expectations

Today's banking customers want more than just a safe place to manage their money; they demand instant services, personalized experiences, and 24/7 accessibility. As research by Salesforce put it, people expect banks to anticipate their needs. Meanwhile, a fifth of banking leaders and managers say they have lost customers because of poor user experience.

Challengers, many who are unburdened by legacy systems, can meet these demands and, in the process, set new competitive benchmarks. In contrast, it takes incumbent banks three months to launch a product. By the time they have caught up on one feature, their more agile, digital-first competitors could be ahead in other areas.

The solution lies in tools like 10x Bank Manager, where banks can update a rate or launch a product in minutes. Greater flexibility and increased agility also help optimize costs. The accumulation of legacy debt can weigh heavily on banks. Maintaining older systems carries higher costs, both in terms of direct maintenance and lost opportunities.

2. Unlocking agility and innovation

Transitioning to modern platforms offers a dual advantage. First, it reduces the overheads associated with legacy systems. Second, it unlocks avenues for innovation, allowing banks to rapidly deploy new features and adapt to market shifts. Modern banking platforms enable a leaner, more agile, and cost-effective banking operation that’s primed for the future. That’s a powerful benefit. Although challengers are innovating fast, they don’t have decades of accumulated knowledge and customer trust on which many banks can draw. The deep understanding of customer behaviors that banks are built on, paired with next-generation banking capabilities, can be a potent tool for innovation.

3. The benefits of a joined-up tech stack

Cloud-native core banking unlocks the potential for groundbreaking solutions, deeply attuned to customer needs, such as tailored financial advice or products for milestones like home purchases or retirement planning. But for this to work, the bank needs seamless communication across its tech stack. Such integration offers customers an experience where every interaction, whether through an app, a website, or in-branch, is informed by a holistic view of their banking history. It's not just about convenience; it's about offering deeply personalized insights and services. It's about unlocking the potential of data, reducing system redundancies, and harnessing the full power of technological capabilities. In this integrated landscape, banks don't just stay relevant. They lead. Setting benchmarks for holistic, data-driven banking.

Embarking on the core to cloud migration journey

Despite the benefits, migrating core banking to the cloud is not without challenges. The intricacies of integrating legacy systems, managing stakeholder expectations, and ensuring uninterrupted service can seem daunting. Historically, some banks have hesitated, with concerns about risk, cost, and the sheer scale of transformation.

But every challenge faced is a step towards a more resilient, agile, and customer-centric bank. Market leaders show the benefits, both in operational efficiencies and new avenues for growth and customer engagement.

By viewing migration as a journey rather than a destination, banks can adopt a phased approach. This allows for continuous learning, adaptation, and improvement, turning potential pitfalls into milestones of progress. In this transformative journey, the end goal is clear: a banking ecosystem that's robust, agile, and primed to deliver unparalleled value to its customers.

For banks, the future isn't just about adapting to a digital world–it's about thriving in it.

Get access to our cloud-native banking migration whitepaper

For more detailed info on core banking migration, get a copy of our whitepaper: Making Sense of Cloud-Native Core Banking Migration.