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5 Questions to Consider Before You Switch Core Banking Providers.

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If you are reading this blog, you probably already know what a core banking system is, but in the case that you’re new to this sort of thing let’s give you a quick breakdown of what a core system is. A core banking system processes daily banking transactions and posts updates to accounts and any financial records. These include deposit, loan, and credit processing. The core banking system also connects with tools for reporting and ledger systems. To put it simply, the core is like the heart of your bank. It’s what helps your bank run properly. That’s why it’s important you ask yourself the following questions when considering switching to a different core provider.

Why Updates Are Important

Consider what has changed in banking five or ten years ago. Today, banking customers expect real-time information about their finances and faster deposits, payments, and transfers. Upgrading systems against potential hacking and other security threats is also vital to the security of those who are members of that bank. The pace of change keeps accelerating, so you have to work harder just to keep up. Or, better yet, implement a state-of-the-art core banking system that can keep you ahead of the pack.

What Questions Should You Ask about a Core Banking System?

Does the Vendor Have Experience?

Choosing a vendor with experience means choosing someone who understands the needs of your bank. An experienced vendor can even anticipate your bank’s needs beyond what you are asking them to do. Experience also gives the vendor the ability to handle any problems that may arise.

Is the Vendor Reputable and Well Established?

Along with experience, does the vendor have a good reputation, and are they well established in their industry? Experience alone doesn’t guarantee either of these qualities. Choosing a well-established vendor means choosing a vendor that has a long track record and will therefore likely continue to be there for a long time to come. Choosing a vendor that has no reputation and hasn’t been around that long is taking an unnecessary risk.

Does the Vendor Align with Your Goals and Help You Achieve Them?

Goal alignment is important for the longevity of the relationship between the bank and the core provider. If the bank or the vendor has different expectations for a project, the goal will not be met. An example of an aligned goal is making sure the bank provides products and services that are tailored to their customers needs. This goal goes both ways for the bank and the vendor. The bank wants its customers to have the best banking services available, while the vendor wants to provide customizable features to its core banking system that’ll help the bank achieve that goal. If your vendor doesn’t have the same goals in mind, you’ll likely have conflict down the road. Once a common goal has been identified and the goals align with each other, the outcome will be mutually beneficial and more effective.

Does the Vendor Provide Customized Options to Fit Your Needs?

One size does not always fit all. A vendor might offer options your bank will never need; and, on the other hand, the vendor might not offer some options you do need. It saves time and money if the vendor provides customized options. Not only does this help the bank and the relationship, but it also proves the vendor to be versatile and adaptable.

What Does Your Relationship with Your Vendor Look Like?

Service is as important as software. While they may have other clients, does your vendor make time to provide you with the attention you need? Do they take the time to resolve issues you may have? Or do they brush you aside and leave your issues un-resolved? While not every relationship is completely smooth, it shouldn’t feel like a constant battle for you to be heard.

Choosing the right vendor is vital, and doing your research to find the vendor who fits your needs may take some time. But the research is worth the investment. Finding a core provider who truly fits what you are looking for can ensure that the partnership between both of you will be rewarding and flourish for as long as the two of you are together.