Banks have been working on spaghetti code and an archaic architecture that prevents the bank to modernize and future proof themselves with Digital technologies. The paper below explains the progressive modernization approaches for of core banking transformation which Intellect has adopted in the past. The approaches take various requirements of the bank into consideration including their systems, the priorities of the banks. The focus of each of the approaches has been to consider the risk appetite of the bank, availability of skills, time available and also their business priorities.
There are four approaches for progressive modernization
Each of the approaches have been defined, explained with an example on how it was taken up and how each of the methods work.
- Process led approach
- System led approach
- Channel led approach
- Data led approach
Process lead approach ensures key processes to be prioritized for transformation and transform in a way that the impact is minimal on the existing code. An example on how a multinational bank implemented a pricing designer across the bank. The pricing designer was implemented by configuring all the bank’s fee and charges. The charges are levied post the legacy systems compute the fee and charges and the new engine over rides the charges posted earlier before the End of day.
System led approach elucidates how each of the systems of the bank can be taken up for progressive transformation
Channel led approach elucidates the possibilities of using how customer experience can be the focus and thus ensure how existing product processors can support the channels using APIs. This will enable the bank to provide digital experience with minimal disruption to the end customer.
Data led approach where we give examples of reference data to be migrated and how that will lead to progressive modernization.
The paper also provides the advantages and disadvantages of each of the approaches and discusses the next steps.
We have also included some case studies on our implementation using progressive modernization techniques.