The external and internal pressures to digitize core banking systems are clear. Many of these proprietary and highly-siloed systems were built decades ago, and were not designed to support digital services or customer-centric experiences. Legacy infrastructure is expensive and cumbersome to manage, and curbs the ability to fund innovation and be price-competitive in the market.

There are different approaches banks can take to reduce their dependency on old systems. Wholescale ‘big bang’ change can take years, cost a fortune, and create risk. For such reasons, progressive modernization has become a popular approach. Here, banks retain their legacy platform and core banking functions, but progressively reduce their reliance on them while enabling digital innovations. 

This paper explores best practices for transforming core banking systems and provides key considerations for assessing and planning a digital-on-top approach.