How to Reach the Level of Functionality Modern Banking Customers Need

October 14, 2021

Today, many banks are united by a common challenge: managing the limitations of their legacy cores and the operational, compliance, and customer personalization pitfalls associated with them.

Monolithic legacy cores don’t offer the level of functionality that modern banking customers need, especially those favoring digital experiences in a post-pandemic world. Mobile apps, online statements, and real-time money transfers are just three expectations of today’s customers. Still, without real-time decision-making capabilities, the legacy cores of many banks can’t keep up.

As we move towards what Everest Group defines as a ‘banking-as-a-lifestyle’ era, banks must consider more than just the operational advantages of modernizing their core. To align with evolving expectations, they need to engage their customers with personalized interactions. The benefits of core banking modernization are clear from an IT perspective, but banks must also create tailored experiences using a 360-degree view of their customers.

Developing a single customer view (SCV) isn’t a new commercial priority, but the challenge for today’s banks is finding a sophisticated way of making their customer insights meaningful for marketing applications. A modernized banking core can record customer data across each of its platforms, but it needs a layer of intelligence on top for it to make sense from a marketing perspective.

As Everest summarizes, “legacy core banking systems operate in product-centric silos and are unable to provide a 360-degree customer view and the API-based channel integrations needed to deliver the desired customer experience.”

Yet, as banks modernize their core, there’s an opportunity to integrate an intelligent customer data platform (CDP) that makes tapping into the potential of customer personalization possible. A sophisticated CDP, such as NGDATA’s Intelligent Engagement Platform, offers the analytical intelligence that banks need by building a robust customer data model using aggregated insights. Unlike product-centric systems, such as enterprise data warehouses (EDWs), the Intelligent Engagement Platform democratizes core data in real-time, allowing for more targeted marketing strategies focusing on the customer experience.

An intuitive CDP can combine insights from every stage of a customer’s banking journey, from their transaction history to their current spending patterns, to create a constantly maturing customer account portfolio. By integrating the Intelligent Engagement Platform, banks can gain and retain customers during the digital transformation process through personalized interactions, such as helping them navigate through credit card and loan application experiences that align with their specific circumstances and context.

Creating highly targeted interactions is certainly on the banking industry’s radar. Enhancing customer experiences is the top strategic priority for 46% of the mid-market banks planning to modernize in the next five years.

Investing in better customer experiences throughout the digital transformation process is sensible for banks, as modernizing legacy cores isn’t a “rip and replace” procedure. Migrating monolithic business applications into a microservices architecture can take years, but banks can continue to build mature customer profiles in parallel by integrating a sophisticated CDP. Ultimately, the Intelligent Engagement Platform offers the layer of insulation that banks need to create truly meaningful customer interactions while modernizing their core.

Read more on ‘Banking on Better Customer Experiences with a More Modern Core‘ or read our white paper ‘Core banking modernization with a CDP: A win-win for IT and Business’.