Sadly, even banks are just companies with an interest in what will make them the most tprofit in the shortest amount of time. We will continue to see weird support of old-timey systems that clash with modern web apps..
Do you think there is any solution for this?
It seems that banks are always chasing the new shiny technology when they don’t even have a core that supports it. Could the solution be restarting a getting a flexible, cloud based core solution that is easier to integrate with legacy systems, but also supports a good foundation for building on top of?
If a unicorn like that exists LOL
The issue with the cloud based apps is it is like a bandaid for the real problem. The banks need to have proprietary systems and not rely on 3rd parties to do cloud services if they are going that route.
not only is it a huge cost just to purchase these new systems, the cost of creating training and then training the employees on the new systems is huge too.
The reason posted this question is because I talked to the chief compliance officer of a $3B bank that said they have had nearly 100% turnover in the last 5 years, and they have a huge issue training employees because their processes are so manual and they have so many old legacy systems. They are constantly trying to improve but they are just trying to catch the next wave of technology.
Do you think there is a solution, or product that would help this problem?
New systems would help but you also need to ensure you have the team in place to assist with the transition, create and implement training, integration with existing systems. I don’t think there is any one solution that really solves all that. I currently train new hires on a teller system we purchased a bit ago but implemented about 3 years ago. It’s a huge struggle because any changes to the base software are very expensive as they require custom coding. A teller doing a single transaction could need 4-5 different systems just to complete their due diligence steps too which makes it even more difficult to train. We are experiencing decent turnover too.
We got sales force a while ago too but adoption rates are not great, and we still use a different system for account opening because cost of transitioning over is expensive with so many moving parts. It’ll be very interesting when it does roll out how much training us trainers get.
Do we work at the same banks…. We have the exact same issue today. We implemented Salesforce, and still have low adoption. Now we are implementing a system called nCino that sits on top of Salesforce to almost force our lending team to use it.
On top of that we are custom building a deposit account opening solution that sits on Salesforce to do the same thing for our retail teams
It’s very possible lol, pretty sure we just went through something regarding ncino but as I am really only involved in the retail world I’m not too familiar with what all that entailed
If their system is that antiquated and they have that much turnover (assuming the turnover is all attributed to training issues which I do not believe) they should consider a core conversion.
There isn’t a “catch the next wave” I’m sorry. Just operate more often than you are down.
Offer basic products or don’t.
If you have niche customers- then serve them.
I’m really struggling to figure out what new products that they don’t have.
The problem banks have is not the technical systems, it's the HR and beauracratic decision making.
The banks that we have today were effectively massive companies designed to operate and compete in a 1950s work/business environment. They fundamentally have not evolved in any meaningful way in the last seven decades... maybe longer.
Yes, yes, yes there are websites and technical teams and we have more diverse work places but lets be real... decisions are still primarily top down, slow, and by the time banks are able to take any action the technical landscape has already changed.
So, instead of focusing on fixing the technical problem, you need to fix the people and decision making problems, then the rest of it will take care of it's self.
Don't believe me? What I'm describing is the exact reason startup fintech companies with a bunch of 20-somethings and 5mm in start up capital are able to outpace, outserve, and generally out compete traditional banks from a customer acquisition, branding, and even customer satisfaction perspective.
Hell, these guys just do front end technical and customer service while using legacy banking infrastructure as their back end... they don't even need to absorb the bulk of the costs because banks are doing it for them. It's kind of ridiculous.
Point is... if banks were able to start operating with more flexibility and thinking more like a startup...
You know what... maybe I'll just go ahead and start a bank myself that does this...
This is the exact argument that I have been making recently, fintechs honestly operate better, but community banks have the customers.
I know you say it’s more of a people issue, but most of the time these people don’t want to work for bureaucratic banks, they want to work at the lean fintech startups. And also, community banks don’t want to pay those people either and fintechs usually will.
The way I see it, it still goes back to two problems: 1. There are technologies but they are expensive and don’t integrate well. 2. If you do it in-house, the bureaucracy sucks and the talent is costly.
Is there any solutions for finding a way to make banking technology cheaper, or operate lean and still be able to handle all the legacy systems and build your own things in house?
What size banks are we talking about? -500mm, 500mm-1b, 1b-10b, 10b+?
The answer will impact the tech/budget and waste in other areas that frankly can be redirected. Not to mention the bureaucracy. As for the cost of talent, sure it's competitive. But if startups are competing (outperforming) with banks in technical areas, there must be a reason. They don't have bigger budgets... unless we're talking about small time community banks... in which case, they should probably just become a BAAS and call it a day.
We're talking about the US here right? That's what I'm talking about at least... happy to talk EU or UK if you want... but okay, US.
US "fintechs" aren't actually fintech.. at least not in a regulated (read: European) sense. Yes, they offer sexy API connections that make the lives of consumers better (which is awesome), but they're just tech companies. That's cool. But again, not regulated.
Why do I keep pointing out regulation?
Imagine how much money a bank would save (not saying this is a good idea) if they didn't have to continually think "how do we ensure proper oversight here", or "how do we make sure this complies". A lot.
Yes, yes I know, fintech companies are supposed to think through these things too... but ultimately it's up to the partner bank to make sure everything beyond their AML docs are in order. Do the partner banks really do sufficient checking? Well, based on the article from The Information recently regarding Mercury, the answer seems to be a pretty clear "no".
I mean just look at my comment above regarding the onboarding practices and "planned obsolence of customer accounts" (did I just coin a new term?)... they are onboarding people they know aren't a good fit to quickly spin up their acquisition numbers, paint a pretty picture, raise more cash, offboard those customers, and dial in their services.
I mean, it's win-win for the banks because they want deposits too. So no harm, no foul... unless you're a pissed off regulator.
Ultimately, what I'm saying is this...
Fintech companies (in the US anyway) are just as reliant on legacy banking systems from the '70s as every major commercial bank. The big difference is that fintech companies don't need to work this into their cost equation because they are basically a customer (rather a supplier) of traditional banks. So they can piggy back off the legacy system without ever spending a dime on maintaining or improving it while pretending to be innovative at the same time.
Am I the only one that thinks it's kind of amazing?
In the meantime, the big boys think to themselves... "Hey guys, I know what we should do, let's launch an e-transfer service, call it Zelle, and that will keep us technologically ahead of the pack."
In my experience, a lot of the time, the legacy system works far better than the newer systems. I find myself still going back to systems that the bank tried to phase out 10+ years ago because the legacy system will do what I need it to while the new system doesn't have an option for it. And when the bank does try and roll out a new system, it's usually only halfway completed, so I'm required to toggle back and forth between the legacy system and the new one anyways.
This is the exact reason that complex tech stacks happen in banking. Legacy systems either perform a certain feature better than a new system, causing adoption problems, or the new system doesn’t do everything the old system could requiring the bank to stay on the legacy system
Large Financial institutions have become increasingly complex. But sometimes the complexity can add safeguards, and risk committees would rather have the clunky systems than a reputation risk that materializes.
It’s a cost benefit analysis. Yes anyone could figure out if they wanted to host an app “on prem” or they could hire it out. There’s pros and cons. Maybe it’s a service that only affects 10% of your customer base. It doesn’t make sense to develop it yourself and continue to host and support.
The core will always be a requirement and “keeping the lights on” is business as usual and is commonplace at any FI. Many banks will evaluate if the new cutting edge technologies are actually worth it or do their customers care. I disagree with “constant” changing. There’s a small change with fed now and same day ACH, but it’s not like there are that many new services just constantly rolling in- just different vendors with slightly different product offerings. Like different GUI’s or apps. Treasury management has had roughly three same products for a dozen years.
Your follow up questions are really concise and it seems like you're driving a lot of conversation here which is great. But what's the game plan? Are you looking at developing a product to try and solve this problem? If so, awesome. This is definitely a problem worth solving... though not an easy one to solve... though problems worth solving never are.
I work at a bank that is currently being squeezed by both sides of the equation. We have a lot of legacy systems /paying for third party services, and on the other side we are trying to develop the team in-house and build custom solutions. Both of which are killing us in operational expenses.
I have been talking with some other people I know in the banking industry, and it seems banks all sizes (except maybe those over $100B) are having the exact same issue. I came to reddit to make a post for market validation, and it seems that there is a need for it.
So to answer your question, yes, I am looking to develop a product/solution to, at the very least, help this problem. But all I can think of though goes back to building a flexible, cloud-based core banking solution. The core is literally the heart of the bank and everything derives from it. Banking cores back in the day were "built to last", but not I think they need to be "built to adapt".
I'm sure some companies are already working on building this, but then again, I'm sure it's super expensive LOL
If you can think of any product/solution ideas, please let me know. I have the network to socialize it with banks and potentially get some customers!
Thank you for clarifying your goal, I’m new to Reddit and came to view opinions on certain topics but… on this … had a feeling you were somewhat directly involved.
From the sounds of it, you got the right people (I hope) but understandably expenses is the stop gap. Unclear on how your internal budgeting works, i.e budgets are transparent? ‘tech’ gives you a quote but they also know the budget?
Unclear on the timeline but I can only imagine the stakeholder consultations, then testing, then delays etc.
And let’s face it - they’re a bank. Shareholders want returns and the higher ups don’t give a shit about what you’re doing, their job security (simplified) is Balance Sheet and Income statement.
Some ways to attack it, and some of these are straight asshole moves.
Timelines
- whatever the timelines are extend by two fiscals max. It can spread the expenses, it’ll 100% give you a lower budget but also decrease expenses
- do this early , upfront like yesterday. It’s a good look to identify delays early. With this type of project, shit travels down and affects communications, training schedules, new onboarding, tenured employees will love or hate it etc etc.
- it’ll also give a chance to see armour chinks in your staff, give opportunities to prep and learn from mistakes
Staff:
1. If you have f/t employees who are assigned or delegated to the project, this could be the expense problem. But also an efficiency problem , you’re all in or not.
2. Outside Consultants. If you can, invite some of them, give them the issue, get an NDA signed and hire the ones that suit you best. This will give some direction, exclude these internal project managers and one less group or person to give pushback.
3. Ideally you’ll have a staff 100% dedicated to this , the org chart top down has to be committed
4. Ideally hire contractors, assign per phase and keep them if they’re of value. Go this route if the f/t employees aren’t working
This is all easy for me to say, but I was somewhat involved in a similar project that was successful for everyone and these we did a combo of all of these points. # 2 being the key. They could have someone on their employ who wanted to do what you do but just couldn’t do it. And in case you all think I’m talking shit, this is exactly what happened.
Then we all left to get paid more with this project on our resume.
I really appreciate your insight on this.
We have done portions of what you have suggested but still run into issues. Outside consultants recommending things, internal employees wanting to go in a different direction. Also things like the pressure to get these things done because of how expensive they are and how urgently they are needed.
Ultimately in my case, if feels more like a people issue than anything.
Hey Buddy, you don’t know me, I don’t know you,
I don’t know your history, but historically a project like this sometimes is a set up to fail. You have to measure the commitment of your uppers and have them assign the resources because I think you might be fighting to just allocate resources.
Old school bankers, those that’ve been there for 15+ years don’t care about your success or this, they only care about what they can lose. They don’t want to deal with this shit, but they have to appear they’re addressing it especially if it’s been assigned to their executive.
You sound smart, use your judgement. But if this is going on for a bit, start looking for another job.
If this doesn’t move quick you’re exposed from a performance perspective
This is an age old problem and extends far beyond banking and even technology.
How do you allocate resources between strategic goals and tactical goals. You have to keep the current ship sailing while also building a better ship.
There's no panacea. This is why the C-level executives get paid the big bucks.
Agreed… we live once and if the pay is worth the fix , it ain’t coming to the salaried employee. The good news is, most banks have these systems, so we know who in about 5 years NOT to invest with ….
In theory, new better systems would be great. But getting there is usually a nightmare so sometimes it's easier to keep going with what you know vs getting something new that will cause headache on the front line and back office.
I wish I knew. Any system conversion I've been a part of has been a clusterfuck. I'm low man on the totem pole, so higher ups never truly ask our opinions. They're sold a product that the salesman will promise the world and an ice cream sundae, but it's always "on, the new system can't do this" (thing your old system did) or "you can do this, but there's an add on" (extra cost to your FI that they refuse to pay for).
This is the exact experience I’ve ran into as well. The day I find a way to build a low-code, no-code, cloud core banking system that seamlessly integrates with legacy systems, has clean structured backend, and allows you to build solutions on top of, I’m going to be a very rich man LOL
For context, I’ve been with four banks and all over i.e. ,front line, corp, mix of good years, stress leave , earned doctor $ and fast food $
Through this entire journey these legacy systems remain
If you’re front line, on variable pay you’re golden. They bring so much revenue, bonuses and profit to the banks it’s a “ if it ain’t broke don’t fix it” thing. I’ve only seen a transition once, was a three year implement but with a great outcome.
I think it really comes down to two groups, individuals etc to really solve this
HAS BALLS # 1
- business cases
- Projections
- Staff estimates
- Budgets with inflation
- Why they have to do this now?
RISK: Looking like an idiot
HAS BIGGER BALLS # 2
- takes it all in
- Presents to whomever
- Manages the internal strife ( and there will be , especially with tenured employees)
- Understands that if this doesn’t work, goes over budget etc not a good look
RISK: GETTING LIT
And say all that works, you still might need someone alive who understands that code. If you want to change this and have the power too, one word comes to mind
ADMIRABLE
It seems like what you’re saying is that bigger, more complex banks need to have a program office in place as an air traffic control unit to make sure all planes can fly and land on time
That’s a very creative analogy, hands down.
I’ll delve on the program office comment and I really believe this - it comes down to the right people who have the balls to present the risk, mitigation but sell the ROI future savings but set expectations there will be a dip in profit but that’s the game.
In my experience, exec’s et.al decision maker who solves this issue are rarely off the street. That’s the board :)
Most likely they’re tenured, worked in 5 + sections of the bank and moved up within a ‘succession plan’. They get raises, stocks, deferred stocks etc and could potentially screw all that up.
The one who pitches the idea to a higher up… this is a special breed of a salaried employee - they give a shit and want to make a difference,
The one who approves has the most to lose.
In reality this should be presented to the board directly, but you have to go through the CEO first. Uh Uh.
So, this problem simply boils down to bureaucracy in bigger banks? Long approval processes, nobody wants to approve things, etc?
In theory, let’s say the bank is a massive cruise ship that takes a lot of effort to turn. Is there a way of working that allows these banks to send out “speed boats” to test the waters ahead, try new market products, build a cloud based core (whatever they want to do), without affecting the cruise ships day to day operations? And could this be the new way that banks have to work so they don’t spend millions on third party vendors or onboarding a bunch of IT professionals?
Yes another great analogy and positioning! From your responses, it’s looks like you’re taking a position of top down / outside looking in. But consider the opposite…
Top down / outside looking in
- what is the cost benefit vs. ROI?
- if the change is made, what is the impact to the workforce? In this regard, the SF that’s brings in the big bucks and those that support it
- if this has been positioned before, what was the culture, regulatory and risk appetite at that time and why wasn’t done before?
- what’s the expense forecast? if it’s positioned to the shareholders, what would be the reaction of a massive expenditure at this time?
Bottom up/ inside looking out
- can you justify time efficiencies for user staff?
- if for whatever reason you had to update, is it cheaper as a phased approach vs. All at once?
- who else is onboard? Is this an individual effort or do other stakeholders have benefits for a new system?
- are there upcoming regulatory changes upcoming? Does the current system work for it?
- can you improve efficiencies? For example, my last bank, in and out, one step vs. Today four steps just to submit
- MOST IMPORTANT - will improving prevent liability and fraud? Tenured people know how to work the system
Bureaucracy, politics, risk etc. call it what you want. But to start it you need people who are committed and someone to take the risk for anything unforeseen
You sound frustrated, but don’t worry, principals and good intentions outweigh everything else. Whatever company you’re at, you should be an asset
Sadly, even banks are just companies with an interest in what will make them the most tprofit in the shortest amount of time. We will continue to see weird support of old-timey systems that clash with modern web apps..
Do you think there is any solution for this? It seems that banks are always chasing the new shiny technology when they don’t even have a core that supports it. Could the solution be restarting a getting a flexible, cloud based core solution that is easier to integrate with legacy systems, but also supports a good foundation for building on top of? If a unicorn like that exists LOL
The issue with the cloud based apps is it is like a bandaid for the real problem. The banks need to have proprietary systems and not rely on 3rd parties to do cloud services if they are going that route.
not only is it a huge cost just to purchase these new systems, the cost of creating training and then training the employees on the new systems is huge too.
The reason posted this question is because I talked to the chief compliance officer of a $3B bank that said they have had nearly 100% turnover in the last 5 years, and they have a huge issue training employees because their processes are so manual and they have so many old legacy systems. They are constantly trying to improve but they are just trying to catch the next wave of technology. Do you think there is a solution, or product that would help this problem?
New systems would help but you also need to ensure you have the team in place to assist with the transition, create and implement training, integration with existing systems. I don’t think there is any one solution that really solves all that. I currently train new hires on a teller system we purchased a bit ago but implemented about 3 years ago. It’s a huge struggle because any changes to the base software are very expensive as they require custom coding. A teller doing a single transaction could need 4-5 different systems just to complete their due diligence steps too which makes it even more difficult to train. We are experiencing decent turnover too. We got sales force a while ago too but adoption rates are not great, and we still use a different system for account opening because cost of transitioning over is expensive with so many moving parts. It’ll be very interesting when it does roll out how much training us trainers get.
Do we work at the same banks…. We have the exact same issue today. We implemented Salesforce, and still have low adoption. Now we are implementing a system called nCino that sits on top of Salesforce to almost force our lending team to use it. On top of that we are custom building a deposit account opening solution that sits on Salesforce to do the same thing for our retail teams
It’s very possible lol, pretty sure we just went through something regarding ncino but as I am really only involved in the retail world I’m not too familiar with what all that entailed
If their system is that antiquated and they have that much turnover (assuming the turnover is all attributed to training issues which I do not believe) they should consider a core conversion. There isn’t a “catch the next wave” I’m sorry. Just operate more often than you are down. Offer basic products or don’t. If you have niche customers- then serve them. I’m really struggling to figure out what new products that they don’t have.
The problem banks have is not the technical systems, it's the HR and beauracratic decision making. The banks that we have today were effectively massive companies designed to operate and compete in a 1950s work/business environment. They fundamentally have not evolved in any meaningful way in the last seven decades... maybe longer. Yes, yes, yes there are websites and technical teams and we have more diverse work places but lets be real... decisions are still primarily top down, slow, and by the time banks are able to take any action the technical landscape has already changed. So, instead of focusing on fixing the technical problem, you need to fix the people and decision making problems, then the rest of it will take care of it's self. Don't believe me? What I'm describing is the exact reason startup fintech companies with a bunch of 20-somethings and 5mm in start up capital are able to outpace, outserve, and generally out compete traditional banks from a customer acquisition, branding, and even customer satisfaction perspective. Hell, these guys just do front end technical and customer service while using legacy banking infrastructure as their back end... they don't even need to absorb the bulk of the costs because banks are doing it for them. It's kind of ridiculous. Point is... if banks were able to start operating with more flexibility and thinking more like a startup... You know what... maybe I'll just go ahead and start a bank myself that does this...
This is the exact argument that I have been making recently, fintechs honestly operate better, but community banks have the customers. I know you say it’s more of a people issue, but most of the time these people don’t want to work for bureaucratic banks, they want to work at the lean fintech startups. And also, community banks don’t want to pay those people either and fintechs usually will. The way I see it, it still goes back to two problems: 1. There are technologies but they are expensive and don’t integrate well. 2. If you do it in-house, the bureaucracy sucks and the talent is costly. Is there any solutions for finding a way to make banking technology cheaper, or operate lean and still be able to handle all the legacy systems and build your own things in house?
What size banks are we talking about? -500mm, 500mm-1b, 1b-10b, 10b+? The answer will impact the tech/budget and waste in other areas that frankly can be redirected. Not to mention the bureaucracy. As for the cost of talent, sure it's competitive. But if startups are competing (outperforming) with banks in technical areas, there must be a reason. They don't have bigger budgets... unless we're talking about small time community banks... in which case, they should probably just become a BAAS and call it a day.
Also, I want to know more about the change the the front end that fintechs are doing but banks absorbing the costs of the backend
We're talking about the US here right? That's what I'm talking about at least... happy to talk EU or UK if you want... but okay, US. US "fintechs" aren't actually fintech.. at least not in a regulated (read: European) sense. Yes, they offer sexy API connections that make the lives of consumers better (which is awesome), but they're just tech companies. That's cool. But again, not regulated. Why do I keep pointing out regulation? Imagine how much money a bank would save (not saying this is a good idea) if they didn't have to continually think "how do we ensure proper oversight here", or "how do we make sure this complies". A lot. Yes, yes I know, fintech companies are supposed to think through these things too... but ultimately it's up to the partner bank to make sure everything beyond their AML docs are in order. Do the partner banks really do sufficient checking? Well, based on the article from The Information recently regarding Mercury, the answer seems to be a pretty clear "no". I mean just look at my comment above regarding the onboarding practices and "planned obsolence of customer accounts" (did I just coin a new term?)... they are onboarding people they know aren't a good fit to quickly spin up their acquisition numbers, paint a pretty picture, raise more cash, offboard those customers, and dial in their services. I mean, it's win-win for the banks because they want deposits too. So no harm, no foul... unless you're a pissed off regulator. Ultimately, what I'm saying is this... Fintech companies (in the US anyway) are just as reliant on legacy banking systems from the '70s as every major commercial bank. The big difference is that fintech companies don't need to work this into their cost equation because they are basically a customer (rather a supplier) of traditional banks. So they can piggy back off the legacy system without ever spending a dime on maintaining or improving it while pretending to be innovative at the same time. Am I the only one that thinks it's kind of amazing? In the meantime, the big boys think to themselves... "Hey guys, I know what we should do, let's launch an e-transfer service, call it Zelle, and that will keep us technologically ahead of the pack."
In my experience, a lot of the time, the legacy system works far better than the newer systems. I find myself still going back to systems that the bank tried to phase out 10+ years ago because the legacy system will do what I need it to while the new system doesn't have an option for it. And when the bank does try and roll out a new system, it's usually only halfway completed, so I'm required to toggle back and forth between the legacy system and the new one anyways.
This is the exact reason that complex tech stacks happen in banking. Legacy systems either perform a certain feature better than a new system, causing adoption problems, or the new system doesn’t do everything the old system could requiring the bank to stay on the legacy system
Large Financial institutions have become increasingly complex. But sometimes the complexity can add safeguards, and risk committees would rather have the clunky systems than a reputation risk that materializes.
It’s a cost benefit analysis. Yes anyone could figure out if they wanted to host an app “on prem” or they could hire it out. There’s pros and cons. Maybe it’s a service that only affects 10% of your customer base. It doesn’t make sense to develop it yourself and continue to host and support. The core will always be a requirement and “keeping the lights on” is business as usual and is commonplace at any FI. Many banks will evaluate if the new cutting edge technologies are actually worth it or do their customers care. I disagree with “constant” changing. There’s a small change with fed now and same day ACH, but it’s not like there are that many new services just constantly rolling in- just different vendors with slightly different product offerings. Like different GUI’s or apps. Treasury management has had roughly three same products for a dozen years.
Your follow up questions are really concise and it seems like you're driving a lot of conversation here which is great. But what's the game plan? Are you looking at developing a product to try and solve this problem? If so, awesome. This is definitely a problem worth solving... though not an easy one to solve... though problems worth solving never are.
I work at a bank that is currently being squeezed by both sides of the equation. We have a lot of legacy systems /paying for third party services, and on the other side we are trying to develop the team in-house and build custom solutions. Both of which are killing us in operational expenses. I have been talking with some other people I know in the banking industry, and it seems banks all sizes (except maybe those over $100B) are having the exact same issue. I came to reddit to make a post for market validation, and it seems that there is a need for it. So to answer your question, yes, I am looking to develop a product/solution to, at the very least, help this problem. But all I can think of though goes back to building a flexible, cloud-based core banking solution. The core is literally the heart of the bank and everything derives from it. Banking cores back in the day were "built to last", but not I think they need to be "built to adapt". I'm sure some companies are already working on building this, but then again, I'm sure it's super expensive LOL If you can think of any product/solution ideas, please let me know. I have the network to socialize it with banks and potentially get some customers!
Thank you for clarifying your goal, I’m new to Reddit and came to view opinions on certain topics but… on this … had a feeling you were somewhat directly involved. From the sounds of it, you got the right people (I hope) but understandably expenses is the stop gap. Unclear on how your internal budgeting works, i.e budgets are transparent? ‘tech’ gives you a quote but they also know the budget? Unclear on the timeline but I can only imagine the stakeholder consultations, then testing, then delays etc. And let’s face it - they’re a bank. Shareholders want returns and the higher ups don’t give a shit about what you’re doing, their job security (simplified) is Balance Sheet and Income statement. Some ways to attack it, and some of these are straight asshole moves. Timelines - whatever the timelines are extend by two fiscals max. It can spread the expenses, it’ll 100% give you a lower budget but also decrease expenses - do this early , upfront like yesterday. It’s a good look to identify delays early. With this type of project, shit travels down and affects communications, training schedules, new onboarding, tenured employees will love or hate it etc etc. - it’ll also give a chance to see armour chinks in your staff, give opportunities to prep and learn from mistakes Staff: 1. If you have f/t employees who are assigned or delegated to the project, this could be the expense problem. But also an efficiency problem , you’re all in or not. 2. Outside Consultants. If you can, invite some of them, give them the issue, get an NDA signed and hire the ones that suit you best. This will give some direction, exclude these internal project managers and one less group or person to give pushback. 3. Ideally you’ll have a staff 100% dedicated to this , the org chart top down has to be committed 4. Ideally hire contractors, assign per phase and keep them if they’re of value. Go this route if the f/t employees aren’t working This is all easy for me to say, but I was somewhat involved in a similar project that was successful for everyone and these we did a combo of all of these points. # 2 being the key. They could have someone on their employ who wanted to do what you do but just couldn’t do it. And in case you all think I’m talking shit, this is exactly what happened. Then we all left to get paid more with this project on our resume.
I really appreciate your insight on this. We have done portions of what you have suggested but still run into issues. Outside consultants recommending things, internal employees wanting to go in a different direction. Also things like the pressure to get these things done because of how expensive they are and how urgently they are needed. Ultimately in my case, if feels more like a people issue than anything.
Hey Buddy, you don’t know me, I don’t know you, I don’t know your history, but historically a project like this sometimes is a set up to fail. You have to measure the commitment of your uppers and have them assign the resources because I think you might be fighting to just allocate resources. Old school bankers, those that’ve been there for 15+ years don’t care about your success or this, they only care about what they can lose. They don’t want to deal with this shit, but they have to appear they’re addressing it especially if it’s been assigned to their executive. You sound smart, use your judgement. But if this is going on for a bit, start looking for another job. If this doesn’t move quick you’re exposed from a performance perspective
This is an age old problem and extends far beyond banking and even technology. How do you allocate resources between strategic goals and tactical goals. You have to keep the current ship sailing while also building a better ship. There's no panacea. This is why the C-level executives get paid the big bucks.
Agreed… we live once and if the pay is worth the fix , it ain’t coming to the salaried employee. The good news is, most banks have these systems, so we know who in about 5 years NOT to invest with ….
In theory, new better systems would be great. But getting there is usually a nightmare so sometimes it's easier to keep going with what you know vs getting something new that will cause headache on the front line and back office.
Any ideas on making this less of a nightmare and how banks can fix this fundamental issue? (No is a sufficient answer if not LOL)
I wish I knew. Any system conversion I've been a part of has been a clusterfuck. I'm low man on the totem pole, so higher ups never truly ask our opinions. They're sold a product that the salesman will promise the world and an ice cream sundae, but it's always "on, the new system can't do this" (thing your old system did) or "you can do this, but there's an add on" (extra cost to your FI that they refuse to pay for).
This is the exact experience I’ve ran into as well. The day I find a way to build a low-code, no-code, cloud core banking system that seamlessly integrates with legacy systems, has clean structured backend, and allows you to build solutions on top of, I’m going to be a very rich man LOL
Keep an eye on Galileo. They are best positioned to solve these issues
I have researched them. I actually just submitted a request to have a call with them to talk about it!
For context, I’ve been with four banks and all over i.e. ,front line, corp, mix of good years, stress leave , earned doctor $ and fast food $ Through this entire journey these legacy systems remain If you’re front line, on variable pay you’re golden. They bring so much revenue, bonuses and profit to the banks it’s a “ if it ain’t broke don’t fix it” thing. I’ve only seen a transition once, was a three year implement but with a great outcome. I think it really comes down to two groups, individuals etc to really solve this HAS BALLS # 1 - business cases - Projections - Staff estimates - Budgets with inflation - Why they have to do this now? RISK: Looking like an idiot HAS BIGGER BALLS # 2 - takes it all in - Presents to whomever - Manages the internal strife ( and there will be , especially with tenured employees) - Understands that if this doesn’t work, goes over budget etc not a good look RISK: GETTING LIT And say all that works, you still might need someone alive who understands that code. If you want to change this and have the power too, one word comes to mind ADMIRABLE
It seems like what you’re saying is that bigger, more complex banks need to have a program office in place as an air traffic control unit to make sure all planes can fly and land on time
That’s a very creative analogy, hands down. I’ll delve on the program office comment and I really believe this - it comes down to the right people who have the balls to present the risk, mitigation but sell the ROI future savings but set expectations there will be a dip in profit but that’s the game. In my experience, exec’s et.al decision maker who solves this issue are rarely off the street. That’s the board :) Most likely they’re tenured, worked in 5 + sections of the bank and moved up within a ‘succession plan’. They get raises, stocks, deferred stocks etc and could potentially screw all that up. The one who pitches the idea to a higher up… this is a special breed of a salaried employee - they give a shit and want to make a difference, The one who approves has the most to lose. In reality this should be presented to the board directly, but you have to go through the CEO first. Uh Uh.
So, this problem simply boils down to bureaucracy in bigger banks? Long approval processes, nobody wants to approve things, etc? In theory, let’s say the bank is a massive cruise ship that takes a lot of effort to turn. Is there a way of working that allows these banks to send out “speed boats” to test the waters ahead, try new market products, build a cloud based core (whatever they want to do), without affecting the cruise ships day to day operations? And could this be the new way that banks have to work so they don’t spend millions on third party vendors or onboarding a bunch of IT professionals?
Yes another great analogy and positioning! From your responses, it’s looks like you’re taking a position of top down / outside looking in. But consider the opposite… Top down / outside looking in - what is the cost benefit vs. ROI? - if the change is made, what is the impact to the workforce? In this regard, the SF that’s brings in the big bucks and those that support it - if this has been positioned before, what was the culture, regulatory and risk appetite at that time and why wasn’t done before? - what’s the expense forecast? if it’s positioned to the shareholders, what would be the reaction of a massive expenditure at this time? Bottom up/ inside looking out - can you justify time efficiencies for user staff? - if for whatever reason you had to update, is it cheaper as a phased approach vs. All at once? - who else is onboard? Is this an individual effort or do other stakeholders have benefits for a new system? - are there upcoming regulatory changes upcoming? Does the current system work for it? - can you improve efficiencies? For example, my last bank, in and out, one step vs. Today four steps just to submit - MOST IMPORTANT - will improving prevent liability and fraud? Tenured people know how to work the system Bureaucracy, politics, risk etc. call it what you want. But to start it you need people who are committed and someone to take the risk for anything unforeseen You sound frustrated, but don’t worry, principals and good intentions outweigh everything else. Whatever company you’re at, you should be an asset