Independent Banker - April 2024 - 20

PORTFOLIO
◎FOCUS CORE
Q&A: Is it time to
change your core?
What questions do community banks need to ask to ensure they're
getting the most out of their core? We spoke to experts on when you
should consider a change, the timeline, the importance of provider
relationships and more. By Elizabeth Judd
core provider is so essential for
a community bank that many
experts compare it to life-sustaining
organs and systems within the
human body.
A
" Changing cores is one of the
biggest decisions any financial
institution ever makes, " says Lance
Noggle, ICBA senior vice president,
operations, and senior regulatory
counsel. " The core is the backbone
of how your system runs. Everything
hooks up to the core, and that's how
your customers see your process. "
Charles E. Potts, ICBA executive
vice president and chief innovation
officer, puts it this way: " There is
nothing more difficult for a bank
to undergo than a core vendor
change. It's like open-heart surgery.
Switching out a core system is the
most complex, difficult thing that a
bank will undertake. " Even so, Potts
estimates that 2% to 3% of banks do
change core vendors in a given year.
Below are seven critical questions,
along with some expert advice,
to help you decide whether a
core change is something your
community bank should be
assessing, too.
Q: What are some signs that it's
time to reevaluate your core?
A: Brad Smith, partner at
Cornerstone Advisors, estimates
the lifetime of a typical banking
core relationship to be 15 to 30
years, although he notes that some
institutions do " get 40 years out
of their core. " Therefore, he says,
considering a core change " requires
bankers to think much longer term
than they do in most things. "
One clear sign that a change is
warranted, says Smith, is when a
vendor is sunsetting a core or no
longer supporting that core after
a certain date. Less clear is when
a bank is using what's known as
20 // ICBA Independent Banker // April 2024
Illustration by Evorona/Adobe

Independent Banker - April 2024

Table of Contents for the Digital Edition of Independent Banker - April 2024

Contents
Independent Banker - April 2024 - Cover1
Independent Banker - April 2024 - Cover2
Independent Banker - April 2024 - Contents
Independent Banker - April 2024 - 2
Independent Banker - April 2024 - 3
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Independent Banker - April 2024 - Cover3
Independent Banker - April 2024 - Cover4
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