Core Conversion: What Bank Leaders Need To Know To Ace It The First Time

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businessman touching icon online banking and icon network connectionCore conversions are an unavoidable component of corporate expansion for many financial organizations. Over time, an old system may become obsolete, or a present platform may simply be unable to meet the future needs of a developing company.

New and upgraded technology typically help banks and credit unions to be more efficient or offer more services. A new core system may also enable them to conduct more secure transactions, better manage data, or serve a certain sort of business. In the end, there could be a slew of reasons for a financial institution to move its fundamental platform.

How Bank Leaders Should Approach Core Conversion

The process of performing a core conversion is difficult, but the key to success is to be meticulous and thorough at every step. To customers and members, a core conversion is a little inconvenience that will pass in a few days. However, for a company, the procedure can (and should) take several months, if not a year. Because each company is different, no two core conversions are ever the same. However, all institutions must normally follow a similar procedure.

Conduct Prior Research And Planning

Before making such a large investment, it’s critical to have a team thoroughly investigate the notion of conversion, determine why it’s required, and identify the goals that must be met for the company’s long-term success. This will aid in the making of subsequent judgments.

Develop Internal Teams For Each Department

Financial institutions must be willing to devote staff hours to learning and installing a new vendor/system once work begins. The conversion team should be greatly expanded to guarantee that all areas of the conversion are handled. To understand how the conversion will affect the company, team members must become nearly obsessed with it. The new program must be taught to the employees. A brilliant new platform will be useless unless it can be used safely and effectively. Because delays are inevitable, the conversion team must keep senior leaders informed about the conversion’s progress on a frequent basis.

Select A Vendor That Understands Your Bank’s Processes

woman using mobile payments online shoppingAn institution can begin studying and selecting a platform provider once it’s apparent what a conversion needs to accomplish. The company should speak with multiple vendors and carefully consider which one is the finest. Vendors can be major, national corporations or tiny, local businesses—either can suffice as long as the financial institution’s requirements are met.

Focus Solely On Developing The Software

Developing core conversion software can be an incredibly daunting task. That is precisely why you are going to need to make sure that you take the proper amount of time to ensure that you are focusing solely on developing the software properly. This makes sure that upon its release it is going to work in the manner that it should. If errors arise, this can easily lead to unnecessary downtimes and loss of business. All of which could have easily been avoided.

Perform Volume Testing To Ensure High System Availability

Performing volume testing to ensure high system availability falls under the category of ensuring that you focus on properly developing the software beforehand. Understanding how the conversion works, in its entirety, is going to be the key to success. And making sure that the new implementation of core conversion software can ensure that your services can stand up to any test you put them through. Including high volume traffic.

Train Staff On The New System Before Full Implementation

The most enjoyable aspect of the conversion is classroom training. Attempt to keep your team from reverting to past habits. If you hear “that’s not how we do it” during training, it’s likely that someone is struggling with the change. It’s critical to give each employee a safe area and time to practice completing a few transactions into the new system each day.

A smart practice is to have your employees take their work from the previous day and enter it into the new system. A token of appreciation or a reward for completing the task goes a long way. You can have a very effective conversion if you are prepared and work hard with your new core supplier.

Communicate The Change With Customers

banker speaking with clients about core conversionFinally, one of the most crucial aspects of conversion is communicating with the customers or members who will be affected. Staff will have spent months preparing, but customers will notice the conversion in just a few days. It’s critical to have a communication strategy in place that prepares them for changes or disruptions and highlights all of the benefits they’ll receive after the conversion is complete.

Talk to the Experts at Hartman about Core Conversion

At Hartman, we understand that core conversion can be complicated and time-consuming. Since every institution is different, there is no “one size fits all” approach to the process. Contact the experts at Hartman Executive Advisors today for more information about how we help bank and credit union leaders understand the process and make the most appropriate decisions for their situation.

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