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As digital technologies drive a customer experience revolution, the digital world is creating a new, strategic position for banks that allows them to form closer relationships with their customers—a position Accenture calls the Everyday Bank. But to become an Everyday Bank, banks need to go beyond tactical approaches to make core banking a highly efficient, high-transaction volume, just-in-time engine that can help them become present in their customers’ everyday lives.
The evolution to digital core banking will be different for every bank, depending on each bank’s current state of digital adoption, ambitions, priorities and business model. But for established players, there are five key starting points to a digital core banking transformation:
Accenture can help banks understand the impact of digital on their business and their core banking capabilities and how to implement a digital core banking transformation. By blending the best of our core banking and digital capabilities we can help banks make the structural changes they need to sustain a competitive return on equity.
Digital banking is here—everything from online banking and mobile payments to direct mortgages and trading. As digital drives a customer experience revolution, it is creating a new, strategic position for banks in the digital world—what Accenture calls the Everyday Bank.
The Everyday Bank focuses on forming much closer relationships with bank customers, being present in their “everyday” lives and satisfying a broad range of life-cycle needs. It assumes three distinct, digitally powered roles to achieve this aim:
Banks that seek to become an Everyday Bank will need to go beyond tactical approaches to make core banking a highly-efficient, high-transaction volume, just-in-time engine that achieves four key objectives:
The evolution to digital core banking does not always mean a radical change—the complexity and depth of change depend on each bank’s current state of digital adoption, ambitions, priorities and business model.
Within the startup approach, banks can choose to:
Buy an existing market-ready solution
Adapt the parent company’s solution, if the bank is part of a larger banking group
Outsource to an established player
Build a solution from scratch—this is the least recommended strategy
Established players can begin their evolution from one of five starting points:
Data as the core. Add new technologies and capabilities to be used across reporting, commercial and operational layers, and provide predictive models and real-time analytics, enabling better storage and analysis of big data.
Omni-channel platform. Provide capabilities “hollowed out from the core” and orchestrated to deliver a differentiated customer experience.
Customer digital ecosystem. Extend the customer database to embrace the new digital customer, complement and enhance existing capabilities to collect, analyze and use customer experience data and share information internally and externally.
Gradual core banking transformation. Focus on digital functions and capabilities that enable core banking to support new channel demands and separate customer-oriented services from internal support services.
Modernization to cloud. Build a just-in-time transactional factory to enable modernization to the Cloud, transform core banking into a component-based, granular engine and decouple the data layer.
Whichever digital scenario a bank chooses, core banking will play a pivotal role as either an enabler or an inhibitor of digital adoption. Banks that seek to become an Everyday Bank must push forward in their legacy system evolution with a complete renewal of their cost structure to realize a potential of 18 to 25 percent return on equity (ROE) by 2020.
Tactical approaches are a good start, but a holistic approach—whether gradual or more transformative—is needed by banks aiming for the highest potential ROE. Accenture helps banks understand the impact of digital on their business and their core banking capabilities, and turn the Everyday Bank strategic vision into a reality. We blend together the best of our core banking and digital capabilities to help banks make the structural changes needed to sustain a competitive ROE.
July 7, 2014
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