Driving digital banking transformation with clarity and speed
Accelerating digital banking modernization through innovation.
Faced with rising competition from cloud-native startups, a leading financial services firm achieves core banking modernization to launch a new era of innovation and growth.
The challenge
Customer expectations are reshaping the financial services landscape—and placing some established firms at a disadvantage.
Core banking modernization has emerged as a response to these rising expectations.
For decades, mainframe-based core banking technologies offered competitive strength. But with the rise of neobanks and other cloud-native competitors, these legacy platforms don’t always allow the rapid innovation and personalized customer journeys accountholders often expect.
Looking to increase agility and innovation, a leading bank in an emerging market launched a core banking modernization initiative. The challenges with its existing platform were evident, but the path to a successful transformation was less clear. In addition to technological hurdles, the project leaders needed to address an important organizational challenge: winning the support of business stakeholders. That meant demonstrating “the art of the possible”—a vision for all the products, services, and customer experiences a modern platform could enable.
Modern banking services—and compelling customer journeys— often demand far more agile development than traditional core banking platforms allow.
The solution
The essence of core banking modernization is to transcend legacy constraints by reducing the role of legacy technology. In a “thin-core” modernization, product and service layers are decoupled from core transaction processing, enabling greater flexibility and modularity across the banking platform. The result: far less complexity, support for agile product development, and modern customer services.
The premise of thin core architecture is simple, but successful implementation can demand considerable skills. Given the scope of transformation, the bank began looking for a collaborator knowledgeable in both the technology and the business aspects of financial services innovation. Deloitte Consulting LLP (Deloitte U.S), working with Deloitte South Africa brought deep experience guiding banks through similar transformations in other markets, and a history of working with multiple core platform vendors. From a business perspective, the bank wanted a collaborator that understood both global trends in financial innovation and the modern banking services that could help unlock real competitive potential.
Making the possible visible
The project team’s track record in core banking transformation demonstrated both technical and business capability. Its BankingSuite assets were leveraged to build multiple full‑stack proofs of concept, helping to win over internal stakeholders and demonstrate the art of the possible.
Because next generation core banking platforms are headless, built without a user-facing front end, it can be hard to demonstrate their functionality and value to nontechnical audiences. As a composable banking platform, BankingSuite can serve as a bridge between a modern front-end interface and a bank’s existing architecture, making it possible to demonstrate core banking proofs of concept (PoCs) in real time—and show stakeholders exactly how customers could experience the bank’s products and services
The BankingSuite platform makes it possible to showcase the value of headless next generation core banking platforms for nontechnical stakeholders.
Three prototypes, three platforms, two months
To demonstrate the art of the possible, the team first held dedicated discovery sessions with the bank’s three business groups—retail, commercial, and institutional—to understand their market challenges and innovation priorities. The team then worked with each segment to build a fully functional prototype showing how a next generation banking core could power innovative market offerings targeted to its top personas.
Each of these prototypes used a different core banking platform to deliver specific capabilities. For the retail group, dynamic product bundling and predictive cross-selling was designed and tested. For the commercial segment, a multiproduct account hierarchy suitable for larger business customers was built. And for corporate stakeholders, the team used a leading next-generation core banking platform provider to create a multidimensional account structure with variable interest rates and account management rules. All complemented the next generation banking core with experience and integration layers powered by BankingSuite. Preconfigured microservices, predefined customer use cases and journeys, existing vendor relationships, and hands-on configuration and coding knowledge let us build all three full-stack prototypes in under eight weeks.
Moving forward with implementation
In addition to giving stakeholders a firsthand view of potential customer journeys, this multi-segment, multivendor approach to prototyping offered the bank’s technology team a direct platform comparison. Based on the PoCs, the bank selected its new core platform.
To lay the technical groundwork for implementation, we developed a next-generation architecture by assessing the bank’s current state architecture, focusing on multicore routing and core coexistence. The team also assessed candidate products to include in an initial market release based on factors including technical reusability, financial benefit, speed to market, strategic soundness, and platform maturity.
The impact
The Deloitte team in the United States and South Africa helped the bank identify a clear path forward for its core banking modernization, with a defined product roadmap prioritizing first launches on the new platform; architectural guidance including an “on-the-edge” migration approach to maintain business continuity; and a detailed five-year business case including projected benefits, costs, and return on investment Critically, the PoCs built helped turn hesitant stakeholders into dedicated advocates for the initiative.
Setting new standards for an emerging market
With its banking technology transformation well underway, the bank is positioned to maintain market leadership despite stiff competition from cloud-native competitors. It can now match their agility as competitors, while retaining the trust, brand recognition, regulatory standing, and customer base that new entrants may lack. Capabilities such as predictive cross-selling, personalized services, enterprise-class account structures, and modern digital banking customer journeys can also help acquire and retain customers. No longer a legacy firm on aging technology infrastructure, the bank is now setting new standards for financial services innovation in emerging markets.
Fully functional proofs of concept converted hesitant stakeholders into dedicated project advocates.
Neil Tomlinson
