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David Gibbard
16 followers -
Omnichannel and Digital Banking Evangelist
Omnichannel and Digital Banking Evangelist

16 followers
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The Failed Promise of Social Media Marketing
Everywhere you read and hear about the promise of social media, the next great marketing tool designed lead companies to the Promised Land. Banks and credit unions create a Facebook account, a Twitter account, a LinkedIn account and a Pinterest account, hop...
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Creating a Cool and Profitable Bank or Credit Union
In an American Banker article, Creating a Bank that's Both Cool and Fair , Chris Skinner  poses a question, what does "cool" mean in banking? I would ask, “How do you create a ‘cool’ and ‘profitable’ bank?”  Transaction fees, interchange fees and other non-...
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Creating a "Cool and Profitable" Bank or Credit Union
In an American Banker article, Creating a Bank that's Both Cool and Fair , Chris Skinner poses a question, what does "cool" mean in banking? I would add, “cool and profitable” to the question. Becoming "cool and profitable" in banking will involve a complet...
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Ah, remember the old days……, the days when you had to get to your bank or credit union branch before 2:00 PM in order to get a deposit recorded as a transaction for that day. Fast forward to today. As Tom Groenfeldt, contributor to Forbes so eloquently writes, “When 40-year old legacy banking systems meet the two-month old iPhone 6, the results aren’t pretty.”  The same thing that happened 20 years ago when a customer visited a branch still happens to you and your iPhone 6 or tablet today. It encounters batch processing. We are in the era of real-time transactions, real-time processing, and instant access to data, yet North American banks and credit unions cannot consistently deliver that experience to their customers or members.  So much time has passed yet so little modernization progress has been made with North American core banking systems. The very systems that drive your credit union or bank. How can you compete against the up-starts, neo-banks, and fintech companies that seek to take piece by piece your most profitable business and leave you with the burden of regulation and no profit transactions when your core banking system is so far behind?   

Core banking systems, also known as core data processing systems were architected and built 30 to 40 years ago. They were designed more than 20 years before anyone heard of the Internet and their basic architecture has not changed since then. They were built to handle internally generated transactions from tellers, loan officers, CSRs and back-office support staff. They most definitely were not designed and still are not designed to meet the needs of external users such as customers and members. As a former executive of a core banking system company, I have seen the inside of the belly of the beast and it is not pretty. They say that if you see how sausage is made most people wouldn’t eat it. At least the finished product generally tastes good. If you saw how core banking systems are architected, enhanced and maintained, the spaghetti code cobbled together, and the lack of documentation you would not want to rely on it to run your bank or credit union. The worst part is many banks and credit unions have a hate/hate relationship with their core banking system and their provider. Why, because the core banking systems in use today, simply were not designed to meet the needs of today’s credit union and banks. As much as your core banking system provider may want to give you what you want, they can’t. Their core banking system solution simply was not designed to meet the needs of modern banking and their customer’s expectations, real time processing, transactions and data management. They are built on outdated technology, they were built around batch processing, and they have enhanced using Band-Aids and patchwork.   

So what are banks and credit unions that do not have the resources of the major national and super-regional banks to do in this situation? Converting from one core data processing system to another core data processing system is like adding internet radio to your 300,000 mile 15 year old car. It may provide you with a feature you are missing, but what happens when the engine blows up? 

Fortunately, there are options, and the best part is the options come with far less enterprise risk than a core banking system conversion and will add long-term functionality and architecture that will allow your credit union or bank to move into the world of real-time processing, transactions and data management, and personalization. 

Components, APIs, standards and the cloud allow banks and credit unions the opportunity to explore true alternatives to the zero sum game of a core banking system conversion. Componentization, APIs along with emerging standards such as BAIN (banks) and CUFX (credit unions) and internal or external cloud  environments allow banking systems to more effectively communicate with each other and allow banks and credit unions an opportunity to create their own Services Orientated Architecture. An SOA will modernize the technology environment by allowing credit unions and banks to mix and match technology solutions they need to adjust and drive their business model and the ability to quickly adjust and implement new solutions.   

Combining a presentation platform on top of a security layer, an integration layer with business and workflow engines, data analytics tied to back-end and stripped down core banking legacy systems will provide credit unions and banks with the flexibility, agility and lower risk profile necessary to offer members and customers the solutions they demand in order to compete in the rapidly changing retail financial services market. 
  
Before your bank or credit union considers a core banking system change evaluate the alternatives which will be less expensive, have a lower risk profile and can be operational much faster and positions your bank or credit you to be agile in the quickly evolving retail financial services market.  
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Getting to the Core – Why a Core Banking System Conversion May Be the Wrong Approach
Ah, remember the old days……, the days when you had to get to
your bank or credit union branch before 2:00 PM in order to get a deposit
recorded as a transaction for that day. Fast forward to today. As Tom
Groenfeldt, contributor to Forbes so eloquently writ...
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Dancing with the Dinosaur
I was
reading an article authored by Marc
Rapport , senior writer at Callahan & Associates, called “ All
For One or One For All? ” comparing the different technology strategies of two credit unions in close proximity to each
other and both relying on select...
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Bi-Direction Channel Banking, the Next Step in the Customer Experience
Omni-channel banking correctly places customers or members at the center of the banking experience. Allowing customers the ability to access multiple banking channels while providing the customer the ability to begin a transaction on one channel and complet...
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The Flaw in Omni-Channel Banking, Why Bi-Direction Channel Banking is Next
Just
when you thought you had the evolution of banking channels figured out I am
here to explain the flaw in the latest evolution of banking channels;
omni-channel banking. The
progression of banking channels has evolved from credit union and bank focused
t...
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Why the Status Quo Must Change - What Banks Can Learn from Credit Unions
Credit union membership declined from June 30th 2013 to June 30th 2014 at 54% of all credit unions, according to NCUA data.  Median credit union membership was also down 0.4%. for the same period. Overall credit union membership grew 3.7%. Also, during the ...
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