The importance of post-go-live communication in core banking
The decision for banks today to change to a new core banking product is a very long-drawn, tough and strategic decision. Business growth, market competition and changing regulations are some of the external factors driving core replacements. There are hard-pressing internal drivers like channel penetration, adaptation to modern technology, systems consolidation and the presence of legacy systems, etc. which influence banks to push and go for this change.
Core vendors work very closely with their clients, right from the day when the final selection of the vendor for core replacement is made. Core vendors and banks work relentlessly all through--from the requirements, design, solution, testing till the final implementation and go-live date. Both parties, core banking product vendors and banks, stake a lot on this journey. Consequently, they leave no stone unturned in overcoming hurdles along this core transformation journey.
The issue, however, is that most core vendors scale down their communications with the bank post the project going live. Continuing this relationship, once the implementation is successful and the dust settles, is equally important for both--the vendor as well as the bank.
Most banks go for a license-plus-maintenance contract for an initial period. During the initial period, banks typically do not perform major customization and enhancement activities. These are initiated once they reach a steady-state period, which normally takes months to a year depending on the size of the bank. Whether the banks sign up for long-term maintenance or decide to have custom development done in-house, it is in the interest of both the parties that they keep their communication channels open and build strong relationships irrespective of whether it is backed by a contract or not.
Listed below are some reasons why this continuous communication and bonding is needed between the vendors and banks post-go-live:
1. Banks have bought a core banking solution and not just a product. As banks grow, they tend to make significant IT architectural changes to their technology landscape, which frequently impacts their core banking solution or integration with it. As a result, these changes need critical evaluation by the core banking vendor's advisory/architecture boards.
2. Core banking vendors, on the other hand, keep developing their product and roll out newer versions to keep abreast of changing needs, regulations and competition. They make these decisions based on their product architectural board's directives and strategy recommendations. It is imperative that they, too, evaluate their existing client solutions regularly to confirm that the bank's core banking enhancements are in alignment with the product strategy and direction.
Although core banking vendors keep rolling out newer versions at periodic intervals, these may not be adopted by banks due to non-alignment with the bank's strategic focus. As a result, the client banks may / may not opt for version upgrades in future. Constant evaluation and communication with banks is crucial to ensuring that their IT architectural changes are in tune with their vendor's product strategy. Let us assume, a bank (client) chose to embark on customization and enhancement activities in-house, without an alignment with the product vendor. There is a possibility that it may create issues and impediments from an architecture/feasibility standpoint when attempting to retrofit the bank's custom changes to the newer product versions.
3. Core vendors should ensure their consultation and advisory architecture boards help the banks with their solutions and direction. This will provide banks with confidence in their relationship and help create great business value for core vendors.
4. After go-live, it's necessary for core vendors to elevate their clients to the status of partners. This partnership will not only help forge strong bonds with customers and retain their business but will also enable vendors to gain more credibility - a sure differentiator against other competitors.
5. This will also be a win-win for core product vendors since it can be the perfect channel to implement feedback and suggestions from existing customers into the product for continuous improvement.
Finacle has, for some time now, operated a Finacle Client Advisory Board. Finacle customers, who participate voluntarily, can put forth their plans before this board. The board can validate their plan, present suggestions and offer feedback. Such partnerships will help banks forge stronger bonds with their vendors, improve credibility and act as a value-added service that deliver an edge over the competition.