Navigating a Core System Conversion


Navigating a Core System Conversion

    by:  Mark Shaw, President and  Ken Innocenzi, Managing Director

You are a community bank or credit union that is not entirely happy with your current core processor. Perhaps you feel that functionality, support and/or pricing may be weak or lagging peers. Or perhaps you have spoken with your peers at other institutions that have engaged other processors and for some reason they appear to be much more satisfied with their core.

Whatever the reason, you have now have decided to explore other options but are not certain where to begin or are apprehensive about whether your institution will be able to handle a core conversion while still supporting their day to day responsibilities.

Navigating a core system evaluation, long-term contract negotiation and conversion can certainly be a daunting process where decisions and timing of activities is critical. The existing data processing services agreement with your current core provider will include terms for termination of the agreement, including any advance notice requirements. Should the requirements not be met, you will likely incur a penalty equal to your monthly services expense times the number of months remaining for the agreement, or some other financial penalty.

If you are planning to change, well in advance of any notice date, your due diligence of other providers of core solutions should be complete and your selection made. It is not, however, just the selection of the core solution, but for most financial institutions, many other ancillary services. These may include the evaluation of loan origination systems, document imaging systems, automated wire transfer systems, payment systems for mobile banking, online banking and card issuance and payment processing to name a few of the many other interrelated processing systems.

Ready to throw your hands up and declare that “This is too much work! We have a bank to run!”? Before you give up, remember that you will likely continue to be frustrated with your current core provider and, if you have determined you are lacking the system features, your financial institution may well miss opportunities for improving service, achieving any cost savings, and/or driving efficiencies that can result from a conversion to a more robust core solution and provider.

Engaging a partner with expertise in this area can provide your organization with the resources to help navigate the process from end to end. An ideal partner will be one that has broad expertise with core processing companies, has current in-depth knowledge of technology costs to ensure that their clients’ costs are fair and reasonable, has the expertise to provide sound advice on how to help you select the right ancillary systems to integrate with the core, and to provide ongoing project management support including a disciplined PMO for creating, updating and maintaining your project plans and activities.

The right partner will do the “heavy lifting” and will provide you and your team with the analysis and facts that you need at each step in the process to make a well-informed decision that will result in the best possible solution for your organization.

The NBS Group is headquartered in Connecticut and South Carolina and is a premier provider of management consulting services to financial institutions. Our team has the breadth of financial institution and community banking core technology experience that encompasses every aspect of your business. The NBS professionals have a long history of working with community and regional financial institutions to support successful core processor evaluations, contract renewals, competitive bids and core conversions and is well-respected by all the providers of core banking technology solutions.