Conquering Your Core System's Shortcomings


While reading about the Naval Academy freshmen attempting the Herndon Climb recently, we couldn’t help but liken it to how bank marketers have to face major obstacles—like their core system—to be successful.

If you aren’t familiar with the Herndon Climb, it’s when the Naval Academy freshmen (also known as plebes) work to scale a greased, 21-foot stone monument to capture a cap that has been placed on top. It is the ultimate test of the teamwork and perseverance taught during the Naval Academy’s plebes’ first year. They don’t quit until they accomplish it – and it is a major milestone that leads them to their subsequent training and future military career.

So, what’s the connection?

Sometimes, a core system can feel like a steep, slippery, uphill climb requiring great strength and creativity to find a way over, around or through the challenges in order to achieve customer satisfaction and robust organizational growth.

If this is the challenge that you are facing, take a minute and find comfort in knowing that you aren’t alone. In fact, a recent NTT research study found that 2/3 of bankers identified at least one major challenge with their existing core deposit banking systems. Now, let’s consider how you can use teamwork and perseverance to find your way to greater success.

 Here are a Few Ideas for Getting Over, Around, or Through the Obstacles of your Core System

Claim a Seat at the Core System Table Don’t let your core system be seen as simply a technological or operational function. Make sure it does what EVERYONE needs it to do. It’s a key driver in marketing and customer experience, and all interested parties and users should be present and have a voice when core system decisions are being made.

One of our clients recently proceeded with a new version of core software that also included valuable service screens to help diagnose and solve customer service issues. However, they didn’t involve the frontline staff in the plan and implementation—and went live with the new system, but without changes to the service screens in place.  This resulted in problems ranging from fixing payroll issues to difficulty opening CDs.  Customers were impacted, productivity was affected, and the bank employees were uninformed and frustrated. With the right people involved, this wouldn’t have happened.

Probe. And Be Persistent. When your core is managed by an Operations or IT department, valuable information often ends up siloed within the core and within the bank. We know of a high-performing credit union in the Midwest that actually created a corporate initiative to counteract that. It involved all areas of the organization, with each department creating a wish list. An expert from the core provider then interviewed the participants and discussed what existed—or what could be built to address the company’s needs.

The credit union discovered new functionality, as well as better ways to use what they had. For example, the marketing department expressed its desire to add a cross-functional communications preference field to satisfy operational needs while also improving targeted marketing efforts. The core representative confirmed the limitations of the operationally-oriented solution offered, but then gave advice on a simple and smart way to program a broader solution within the system.

A process like this can be valuable to your provider as well, as their evolution is essential.  If they are paying attention to the changing competitive environment and your unfulfilled needs, they can be improving their offering—and communicating it more effectively. 

Find the Suppliers who are Doing What the Core System Can’t. For all of the things that your core system provider can’t offer, there are many other companies out there ready to successfully address those challenges. Online account opening, an expert digital offering, automated onboarding and “next best” cross-sell: There are other suppliers for all of that. With the right approach, success can be found. (We’ll share tips on how to select the right supplier in a blog post next month.)

At a recent Galapagos Marketing customer forum, one of our outside presenters speculated that we may soon get to a place where a financial institution simply shops a series of cloud-based apps that can truly connect and offer the required functionality, making it easier to stay competitive without overhauling an entire core to do so.

Sometimes, a Band-Aid is the Answer. As an example, there are “online account opening tools” that look like an online experience to the customer but require your operations team to actually open the account.  Before going this route, it makes sense to explore online account opening tools that will actually integrate with your system.  But if none of those are feasible, there are times when a band-aid beats the alternative of no viable offering on the horizon.

Don’t underestimate the value of your involvement in core selection, operation, enhancements, and even replacement. It could make a significant difference in the value your system offers (or, on the flip side, the challenges it creates).