Driving innovation by shadowing legacy systems

Gone are the days where you opened a bank account as a child or at university and then stayed loyal to that bank for life. Today, customers are switching banks like never before. The many current account switching incentives that are now offered underline just how prevalent the practise is and it isn’t just about the financial bonus, with banks also offering to take care of updating your Direct Debits as well, it is easier than ever to move.  

Before fintech made it so easy to facilitate these changes, it would have taken an incredibly poor customer experience to drive someone to move banks – because it was just too painful. Now, with switching being made so easy, it doesn’t take much for customers to start looking elsewhere. So for financial institutions struggling to keep their digital user experience and product offering up to date, there is a real risk of losing customers or, at the very least, losing share of customer.

This is where next generation core banking can enable institutions with legacy technology to keep up with the challengers and innovate without risk to their legacy accounts.

Paul Payne, CTO, explains how it works. – Established institutions with legacy technology can use SaaScada’s core banking engine to create shadow copies of their existing customer accounts to deliver much improved access to customer data and unlock trapped value. This is typically achieved using a batch synchronisation process running at a set frequency. With the transactions mirrored into a scalable and resilient cloud-native core, online banking, mobile apps and other services can consume the account information using open API’s. This allows sustainable investment to be made in customer experience, opens up a clear migration path away from legacy technology onto a modern core and puts the bank back in control of its own destiny.

So not only can existing institutions fast track their product development using next generation core banking technology but they can also do so in tandem with their legacy system.  Anyone who has worked in a large institution with legacy systems would know that it takes a long time to turn the ship. Not only is there  inherent risk in updating systems that have been pieced together over decades of change, but there are also the long lead times involved with testing at all stages to establish if unknown interdependencies will impact seemingly unrelated systems.  By implementing a shadow system using new core technology new products can be built, tested and put live without impacting the legacy systems.  With data being brought across from legacy systems in combination with the real time data coming from the newer implementations, more immediate and holistic insights can also be gained to drive better customer experiences and better MI. 

Anyone who works in financial services has seen the fallout from institutions migrating an entire book to a new system. Not only does the 24/7 nature of banking usually require a declared downtime for implementation but the immediacy of online banking ensures that everyone knows when things have gone horribly wrong.  Utilising a next generation core banking system that can shadow your existing systems enables a controlled systematic migration of a customer base. Immediate access to data ensures that implementation teams are on top of activities throughout the migration process and can inform both project teams and management on the success or challenges being faced and allow for iterative changes when needed. 

Our founder, Nelson Wootton, talks more about the benefits of employing a next generation core banking engine to drive innovation in his no need for open heart surgery video.