Banks and credit unions must be determined: digital investment is essential despite barriers created by legacy systems.

For large institutions, the need for change rarely comes at the right moment. It can be tempting to postpone key investment because short term costs seem high, or cultural barriers seem too great. The banking system faces precisely this scenario with digital transformation.

In 2023, reluctance to embrace change is exacerbated by pockets of instability in the banking sector. However, the pain of change is often overestimated. With the right partners, digital implementation can be straightforward – as we demonstrate with our easy to adopt travel money services.

Now more than ever, digital investment is essential

Faced with digitally-based competitors, established institutions cannot afford to agonise over the disruption that digital transition might cause. Rather than wait and be forced to change later, banks and credit unions should act now.

This changing financial landscape is discussed in a recent article by Jim Marouos in The Financial Brand, a digital banking publication. Supported by recent data, he describes (amongst other things) the continuing reluctance of industry executives to fully engage with innovation – at a time when digitization of financial services is a key driver in reducing friction in the customer journey.

Here’s the point: the need for change is consumer driven. We’re all used to running our lives online and it’s irritating when something like banking (or a subroutine like buying foreign currency) can’t be done on a smartphone. The bank or credit union that ignores this fact is heading for hard times.

The way forward is through collaboration and outsourcing

Rather than replacing all legacy systems in one go, the response can be more nuanced. In the medium to long term, institutions with legacy structures and systems can’t avoid re-thinking how they function. This needs to be a live discussion, now. But in the shorter term they still need to adapt to digital delivery.

The answer lies in collaboration with specialist service suppliers, using software that sits alongside existing systems, rather than replacing them. As many of these are cloud based, the need for immediate system replacement is significantly reduced, while the customer still gets the online service they expect.

To discover how your organisation can take advantage of this kind of facility, watch this video describing our Money 4 Travel service.

Jim Marouos’ article can be found online at The Financial Brand.

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