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Driving Change

Five questions every bank must answer to justify a core transformation


While banks around the world have tackled core transformation and are already reaping the rewards, U.S. banks, which have largely remained on the sidelines, are taking notice. Is it time for U.S. banks to finally take on the challenge of core transformation? For many, the answer today is a resounding “maybe,” because while many banking leaders understand that core transformation could drive big benefits in the long term, they believe the costs and risks associated with transformation simply outweigh the benefits. End of story.

However, is that still the case? Recent seismic shifts in U.S. banking are spurring a growing number of banking leaders to rethink the whole issue of transformation. For many, it is increasingly difficult to ignore the benefits being chalked up by banking peers abroad, particularly those in Australia, Canada and Europe – including the impact to customer experience, efficiency ratios and reputation.

Perhaps the problem lies with the business case. In our work with banking leaders around the world, it has become clear that in many U.S. banks, a short-term, myopic focus on costs is obscuring the range of benefits that transformation can deliver. As a result, banking leaders are tempted to kick the issue of core transformation down the road, but by doing so, they may be sacrificing exactly the types of benefits the board, shareholders ,and customers are seeking.

Doing nothing may be an easier choice, but can banks really afford to do that? As real costs climb, it’s becoming clear that banking systems currently in use are unable to support future growth, enhance the customer experience, and mitigate the rising risks of operating in the current environment. No one is asking: What is the cost of doing nothing?

In this article, we’ve identified five questions – which our clients are being frequently asked about their business from a range of stakeholders, including investors, regulators, the board, and senior management – that can help sharpen your thinking about the impact of a core transformation. These questions aren’t just for technology leaders. They span the C-Suite. Anyone who has a stake in increasing the effectiveness of the business should have an interest in answering these questions. 

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As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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