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When banks undertake a core banking system transformation, having insufficient dedicated resources, inadequate planning, and lack of preparation can derail the entire project. These pitfalls are common reasons why many bank transformations fail to achieve their desired outcomes.
Insufficient Dedicated Resources
Core banking transformations require full-time, dedicated personnel who can provide specialized expertise throughout the process. Attempting to have existing employees work on the transformation in addition to their regular duties is an ineffective approach that lacks the necessary focus. Dedicated resources are critical for coordinating with vendors, managing budgets and timelines, ensuring system integration, communicating with stakeholders, and providing training.
Inadequate Planning
Lack of comprehensive planning prior to launching a transformation leads to unexpected obstacles and challenges. Banks need a clear roadmap that defines the current and target state architectures, identifies all dependencies, and estimates the required resources and costs. Without detailed planning, institutions risk delays, costly overruns, and stakeholder disruption.
Lack of Preparation
Failing to properly prepare for a core system overhaul can alienate key stakeholders like customers, employees, and regulators. Banks must thoroughly analyze how the transformation will impact stakeholder groups and develop transition plans to make them aware of upcoming changes and how they will be affected. Engaging stakeholders early is crucial for buying into the process.
Adequate resources, extensive planning, and meticulous preparation are critical success factors for any large-scale core banking transformation initiative. Institutions that take the time to get these elements right upfront will be better positioned to achieve their desired outcomes while minimizing disruptions and controlling costs and timelines.
If you would like to see the full list of Why Core Banking Transformations Often Fail click the link.
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