How important is a modern core banking system, really?

With an ever-increasing stream of digital-only banks springing up around the world, IBS Intelligence ponders how vital is it for these tech-savvy banks to have genuinely modern core systems?

‘Old school’ rules?

Macquarie Bank ©Mal Booth, Flickr

It would seem that for all the chatter about component-based core system replacement and gradual renovation, plenty of banks are still going the ‘rip and replace’ route.

Take Macquarie Bank, for example. In 2012, one of its senior managers called core system overhauls ‘old school’ and that the best model was to supplement existing platforms with layers on top for services such as apps.

In 2013, however, the bank went ‘old school’ and signed for a new core system, SAP for Banking. It has recently reported reaching a milestone in this five-year, AU$250 million project.