The Imperative of Workload Automation Before Core System Upgrades in Financial Institutions

Considering a core migration in the near future? You're in good company. Over 60% of banks are either in the midst of or are contemplating a shift to a contemporary cloud-based core banking system. A combination of factors fuels this momentum after many financial institutions (FIs) delayed their modernization projects for years – or decades.

First, the current financial climate characterized by rising rates bolsters bank and credit union margins, paving the way for essential, albeit expensive, system overhauls. Additionally, outdated on-site systems, some of which have been operational for decades, are struggling to meet the modern consumer's expectations, pressing established banks to innovate swiftly.

This urgency is further compounded by an impending knowledge vacuum as seasoned professionals from the Boomer generation approach retirement, and the current market grapples with a shortage of advanced technical expertise. Meanwhile, many traditional systems are ill-equipped to comply with escalating regulatory demands for evolving security measures. As we approach 2024, the industry stands on the cusp of a significant wave of core modernization. Compliance pressures are increasing, and industry regulators demand that institutions employ the latest security and privacy protocols. In many cases, legacy systems are not prepared to keep up with these requirements.

Given these challenges, it's clear why many institutions are gearing up for core modernization. However, before diving into this undertaking, a pivotal step can pave the way for success: workload automation. Here's what you can expect from workload automation:

  1. Start Realizing ROI Immediately

Migrating to a new core system is among the most intricate, time-consuming, and expensive IT endeavors an FI can embark on. This process engages personnel from various departments, affecting not just IT but also areas like customer service, digital banking, branch functions, legal, finance, and more. Given its intricacy, it's no surprise that technology integrations often exceed their projected timelines and budgets, sometimes by as much as 100%. Such core transitions can span several months or even years.

However, there's no need to delay in harnessing operational efficiencies. By not acting now, FIs risk wasting precious time and resources—assets that could be invaluable during the core transition. FIs can realize a notable ROI in just a few months by adopting a workload automation system. For instance, FIs can achieve automated processing by focusing on core operations, negating the need for continuous manual intervention and round-the-clock IT monitoring. Such automation also bolsters security measures, streamlining role-based access and ensuring all actions are recorded for audit purposes.

  1. Maximize Your Available Resources

When gearing up for a core transition, the expertise of numerous team members will be crucial. However, not all of them will be essential throughout the entire process, especially during the early stages. Introducing workload automation early on is a more straightforward project that can utilize the expertise of these individuals, allowing institutions to experience benefits like cost savings and enhanced efficiency sooner.

  1. Integrate Efficiency from the Get-Go

By harnessing powerful solutions to automate tasks before initiating the core transition, institutions can minimize the manual operations that need transitioning. This proactive approach accelerates migration, ensuring a more efficient process with fewer resources and time invested. Consequently, this reduces the retraining needs, allowing institutions to realize cost savings and operational efficiencies more rapidly.

  1. Minimize Training Duration

One of the most resource-intensive aspects of a core transition is training. Every team member must familiarize themselves with the new system, from front-line staff to IT specialists. By automating repetitive tasks in advance, institutions can significantly reduce training time, leading to fewer mistakes and a more streamlined user experience.

  1. Enhance Processes Beyond the Core

Workload automation's capabilities aren't confined to core functions. It can seamlessly integrate various scripts into comprehensive workflows, managing various technologies from traditional systems to advanced platforms like cloud and IoT. For instance, it can optimize document management processes, thereby streamlining workflows. It can also simplify other IT and business processes, such as data warehousing and AI applications, reducing the need for manual intervention.

Workload automation can address myriad operational challenges, from ensuring business continuity even during unexpected disruptions to managing intricate file transfers across various entities.

  1. Adopt a Phased Approach

There's no need to overhaul everything simultaneously. Adopting a phased, agile approach is beneficial because core migration is a substantial project requiring significant time, resources, and investment. By automating manual tasks upfront, institutions can mitigate potential risks, realize benefits earlier, and alleviate team pressures.

As credit unions stand on the cusp of digital transformation, the role of workload automation cannot be overstated. It's not just a preparatory step but a foundational one, ensuring that the transition to a new core system is as seamless, efficient, and beneficial as possible.

The Future is Now: Embracing the Digital Shift

In the rapidly evolving realm of FIs, the push toward modernization is not just a trend but a necessity. As we stand at the intersection of technological advancements and rising consumer expectations, financial institutions must be proactive, agile, and forward-thinking. The journey toward core modernization is undeniably challenging and has potential pitfalls and complexities. Yet, it's a journey that opens the door to unparalleled growth, efficiency, and customer satisfaction.

Workload automation and orchestration emerge as a beacon in this transformative journey, illuminating the path toward operational excellence. It's not merely a tool but a strategic ally, ensuring that every step taken toward core modernization is grounded in efficiency, security, and innovation. As we look ahead, the message is clear: the future of FIs relies on a strong digital transformation strategy, and the time to embrace this digital shift is now.


About the Author
Ryan Dimick is the Chief Product Officer at SMA Technologies in Houston, Texas. Throughout his nine-year tenure at SMA, Technologies Ryan has also held positions as Director of Engineering, Director of Cloud Services, Software Architect, Sr Business Consultant, and Chief Technology Officer. He started his career at Corning Credit Union as a user of the OpCon automation platform and held positions in IT Operations and Programming.  Outside of work, Ryan loves to be creative in the kitchen by mixing cuisines and creating culinary concoctions with his family. He loves running with his dog, the serenity of growing a garden and producing his food, and his competitive spirit prevents him from saying no to ping pong challengers.

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