In a more and more digitalized world, it’s not just time for banks to pull the trigger on modernizing the ancient legacy core system, it’s also time for them to realize the importance of digital onboarding.

American customers are demanding better products and better experiences from their banks. As technology becomes faster and more convenient elsewhere, it is expected of the banking experience as well. And the rising number of digitally-based banks is going to make this a more urgent problem to solve.

According to this Accenture.com article: “The 2014 North America Consumer Digital Banking Survey of nearly 4,000 bank customers in the US and Canada, evidence suggests that traditional banks have a somewhat uncertain relationship with their customers despite the fact that in the US nearly 40 percent of customers—64 percent in Canada—have been with their current bank for over the past decade or more. Results of the survey indicate that customers want a bank that’s nimble and proactive, one that can be a part of their daily lives. The idea of “convenience” in banking is undergoing a shift away from branch locations and toward digital products and services that mesh with consumers’ “smart” mobile-empowered lives. Also, banks that cling to the status quo risk being viewed more like utilities that conduct financial transactions.“

Core legacy systems in banks keep information in a number of independent, unlinked areas, which make updates impossibly difficult. Updating one thing often means that someone has to go in and manually change that one thing in every core and system that the core is connected to. This includes areas like onboarding, billing systems, and the customer relationship management system. They all must be updated individually, which can take months to complete per individual update.

Onboarding clients used to be a very operations-based and compliance-driven enterprise, not set up for optimal customer service because the customers coming in to your banking system would interact with banks face-to-face, with employees and managers who (hopefully) put excellent customer service at the forefront. Now that you may never have a customer walk into a brick-and-mortar location in the entirety of the time that are a banking customer, the interface and buildout of your onboarding is the first touchpoint your clients will have with your bank. And possibly the only touchpoint. Successful banks who seek customer retention need to understand the importance of an error-free, friendly, and adaptive system from the beginning.

The recent system failures at Westpac, HSBC, NatWest, who all had customers unable to bank with their institution, and SunGard whose glitch in a legacy system led to a disruption of the pricing of billions of dollars of assets, and had to involve financial regulators, are all prime examples of the way that layering technology on top of fundamentally outdated core legacy systems can only be considered a stop-gap, and can never a permanent solution. Attempting to add digital channels on to the aging core will only serve to magnify the outdated system’s flaws. While many in the industry speak doubtfully about the ROI of completely overhauling a legacy system to a brand new core, and the risks associated with such an overhaul are high, the high demands and expectations of the consumer and the newer competitive digitally-based banks will ultimately end up making the decision for you.

The analytics power of updated technology and the way that it can monitor trends, habits, the amount of time lingering on a page is an immeasurable benefit. The more data you can collect, the more profiling of the needs of the consumer, the more arsenal you have at your disposal to give them exactly what they want.

Harnessing modern technology from the first interaction to the core processes will, in the end, be the determining factor in the battle for customer loyalty.


Victor Notaro is an accomplished Corporate Banking Executive with a demonstrated record of success leading consultative and relationship management strategies in the financial services industry. Victor Notaro is skilled at building and managing high performing teams of professionals in commercial and corporate banking, fostering relationships with middle market and multi-billion dollar companies. Victor Notaro’s record reveals exceptional performance in the development of business capital strategy, with expertise spanning start-up of business units, leading YOY revenue growth, and producing sales in the millions of dollars. Victor Notaro is the Senior Vice President, Corporate Banking / MidCorporate Banking at Citizens Financial Group.