How Financial Institutions Can Think Like a Serial Acquirer
Despite the advantages of upgrading to a more modern core, many institutions continue to postpone this critical project because the process has traditionally been costly, risky and complex. Fortunately, intelligent automation and other new technologies can ease many of these concerns.
The role of the core technology provider is to partner closely with institutions to understand when an upgrade is right, based on institutional goals, and then leverage artificial intelligence and other innovations to streamline the journey. Financial institutions will want to be sure their partner prioritizes communication and offers a variety of support services and training options.
Within their own organizations, financial institutions can prepare by learning best practices from their peers that have become proficient at mergers and acquisitions — a landscape that institutions navigate regularly under tight timelines. M&As are multidimensional projects that involve data migration and system integration.
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By applying the best practices and skill sets from M&As, financial institutions can reduce operational risk, boost confidence and ensure project success. And similar to M&A activity, core modernization holds the excitement of positioning the financial institution for accelerated growth and better service. In many ways, embracing core modernization is as much about an institutional mindset shift as it is about the technology itself.
The Benefits of Intelligent Automation in Finance
With modern tooling and application programming interfaces, core migrations can be efficiently scaled while maintaining high quality. The path for core modernization can be further simplified when upgrading to a modern core from the same provider as the existing core.
Savvy core providers can deconstruct the upgrade path because they own both systems and automate up to 90% of the data conversion. If most fields are mapped in an automated, repeatable manner, core migration becomes more of a validation exercise than a traditional conversion.
What’s more, this model only grows in intelligence over time, as rules are continuously refined. The large number of financial institutions that have already undergone core modernization in recent years have led to more streamlined and intelligent migration processes. Key to this is the layering of AI, which can convert technical data mappings into plain English, enhancing understanding for nontechnical stakeholders.
When specially trained with core-specific information, agentic AI and virtual assistants also support a more satisfying implementation experience. A recent PwC report found that fully embracing AI can drive improvement of up to 15 percentage points in financial institutions’ efficiency ratios.
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