Skip to content
CCG Insights

Research Snapshot

  • Research Snapshot

A Quarter of Banks Are Ready for a New Core

A Quarter of Banks Are Ready for a New Core

A quarter of banks surveyed by the American Bankers Association (ABA) in September 2020 are likely to leave their existing core provider when their contract expires. That is probably a testament to the increased focus across the industry on cloud-based, application programming interface (API)-based systems, which traditional core providers are lagging behind on getting to market. Competition is also heating up as foreign providers like Temenos and TCS and newer platforms like Finxact and Neocova enter the space with the modern, next-gen systems that banks are looking for.

Top of mind for execs today appears to be freedom — the ability to customize and integration with other technology/APIs were ranked as the top two challenges these banks face with their current provider relationship. These institutions know that they are moving quickly to an environment where working and integrating with third parties will be key to success — nearly half of global financial institutions (FIs) surveyed by PwC say they have fully embedded fintech into their strategic operating model, and only 4% have no strategy for fintech at all. Those banks that don’t have the infrastructure to support integration will struggle to keep pace. To be fair, the leading providers in the US, including FIS, Fiserv, and Jack Henry & Associates, have API strategies by this point. The issue is that their offerings are still taking shape and access to these services is not democratized across all clients.

An expiring contract means an opportunity to revisit how well your core provider is handling your needs, and potentially look for a new provider. But it’s also an opportunity to think about what future capabilities need to be baked into your contract to begin with, even if a bank decides to stay with their current vendor. Providers can charge large sums for API access, often per call, as well as maintenance fees. Banks that are proactive at securing favorable terms on these next-gen capabilities during contract negotiations are likely to benefit handsomely in the long run. Regardless of whether or not you plan to jump ship, thinking through what capabilities you are going to need down the line can help secure a better deal and futureproof your business. This will require a real strategic approach at the point of negotiation; with many of these contracts lasting years, it should be viewed as a time to ensure that not only is your bank getting access to the innovations necessary to succeed, but also securing that access in a way that makes sense.

You Might Like These, Too

Bank Customers Favor Mobile Over Online

Bank Customers Favor Mobile Over Online

Is BaaS Headed for the Back-Burner?

Is BaaS Headed for the Back-Burner?

The Importance of UX to Differentiation

Why Now Is The Time to Expand Your Digital Commercial Capabilities

Why Now Is The Time to Expand Your Digital Commercial Capabilities

Leaders in Bank Consulting

About CCG Catalyst
Latest Insights
CCG

PHOENIX • NEW YORK • LONDON • SINGAPORE

Phone: +1-480-744-2240  • Contact Us

© 2023 CCG CATALYST CONSULTING. Privacy Policy & Terms of Service.
Request a Call Back
Linkedin Twitter
Subscribe
to our Insights
Subscribe
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
BANK
FINTECH
FUSION
  • About
  • Services
  • Insights
  • Fintech
  • Research
  • Team
  • Contact
  • Press
  • Careers
  • Events
  • RFI / RFP
  • Terms
  • Privacy
Linkedin Twitter Search
Subscribe for Insights

CCG INSIGHTS FOR BANKS, FINTECHS, AND CREDIT UNIONS

The Fed, Real-Time Payments, Alexa and Apple P2P, Part of Payment Revolution
  • Weekly digest of what's new
  • New research snapshots
  • Exclusive access to banking and fintech research
  • Industry news
  • Invitations to webinars and webcasts