Overcoming the Fear Factor: Migrating Core Banking Systems
Many top tier banks have opted not to replace old core systems built in the 1970s and 1980s. But one brave bank was willing to take the plunge.
In the report, , Celent charts Webster Bank's migration from a thrift core system to a commercial bank core system, in which the bank supported its growing commercial business, installing modern teller and platform solutions and a unified core architecture.
Ms. Zeynep Fredrick, Webster Bank's CIO, chose to outsource the core, which is not a common decision at banks in the US$20 billion asset range. "People who knew me were surprised," says Fredrick, "but I needed to remember that this conversion was for Webster Bank, not for IT." Ultimately converting from a Unisys mainframe environment to an IBM mainframe environment was too expensive to justify keeping the core in-house.
"Webster accomplished in 15 months what could have easily consumed five to seven years," states Bart Narter, author of the report and senior analyst in the banking group at Celent. "I haven't seen a core migration in North America of this magnitude in the past decade or more," he continued.
The report also includes an examination of the trends in outsourcing of core systems across bank sizes and geographies. Celent uncovered huge geographic differences in the appetite for outsourcing. Everyone acknowledges that outsourcing is becoming more popular, but it is far more popular in some regions.
A table of contents is available online.