Core banking replacement is often compared to an ‘open heart surgery’. And true it is! Each core banking replacement comes with its own set of challenges and risks involved. We often come across news of core banking system failures. While at the surface level they look like IT failures, in reality it is much more in the form of customer agony, the bank’s reputation, financial loss, and sometimes even security concerns.
Why do CBS transformation projects fail? Is it the Banks’ fault and improper planning by the bank? Is it the product vendors fault? Is it because of cultural issues, integration issues, performance issues, and product quality and software bugs? Is it because of lack of adequate end user training? Is it because of inadequate buy in from key stake holders? Or is it Inadequate Scope Management and Project Planning?
Market data indicates that it is usually a combination of the above questions/parameters. The core banking product vendor often comes in at the receiving end but it should be noted that the same vendors which have failed in a few cases have actually had huge successes as well.
The CIO who is planning a core banking transformation needs to ensure success as the ramifications of a poor implementation can be disastrous. This is where it is very important to follow a methodical process for selection and implementation of a core banking product.
My experience tells me that before implementing a core banking system, understand your requirement; analyse well; account for possible errors, malfunctions and snags; involve all stakeholders in the process of data migration; think through interface exceptions; leave windows for adequate testing to avoid unpleasant surprises; and last but not least, identify your implementation sequence after a detailed discussion with different stakeholders. A detailed planning may take a lot of time, but it gives the implementation programme the edge of visibility, backup plans, higher success rate, and the possibility to account for the unexpected at times.
As someone has rightly said, ‘Would you rather spend 99 per cent of your time in planning and 1 per cent in execution OR would you rather spend 1 per cent in planning, 99 per cent in execution, and then another 50 per cent in repair and re-work?’
backup plans,core banking,Customer agony,data migration,market intelligence