How banks modernize digital core, keep in reg compliance

Banks are aware that they need to modernize their technology stack to gain a competitive edge in the market and serve customers better. There is certainly an awareness of the challenges traditional dominant providers face in keeping up with the evolution of today’s digital banking demands. However, most of the conversation has focused on the time, expense and risk of disruption from undergoing a major system overhaul.

But there is another key factor holding banks back – a lack of clarity and detail about how core banking providers can help banks maintain regulatory compliance as they implement these new systems.

While the best digital user experience is not everything, it is essential that a core banking platform powering the UX is supported by the latest regulatory compliance standards. The consequence of non-compliance is something that banks simply cannot afford.

Navigating the compliance risk zone where hesitance to embrace the core modernization hits because unknowns exist about what the risks are, how to get down this path and how to mitigate those risks. But before banks investigate a potential digital core provider, there are important questions to consider. The first six will help clarify the Bank’s approach to digital transformation.

1. What is the Bank’s tolerance for regulatory risk related to technology?

2. What are the implications of a potential digital core solution for regulatory risk, and what acceptance mechanisms can be implemented to help mitigate risk?

3. How the Digital Core solution will streamline current compliance processes; Are the benefits expected and do the benefits outweigh the costs?

4. What impact will the Digital Core solution have on the regulatory change management process?

5. Putting this into practice, how does the bank make regulatory partners and examiners comfortable with the decisions?

6. How does the bank transform its current risk tolerance and plan for a digital environment?

Once a bank has internal clarity on its digital transformation approach, it should ask its potential digital core provider more informed and meaningful questions, including:

7. How is the Digital Core solution designed to enable the bank to comply with regulatory requirements?

8. How does a bank ensure that a regulatory compliance approach is future-proofed to evolve with the constant changes in the market?

9. How is the bank tracking today’s changes and how is it communicated with customers as requirements evolve?

10. How does the Change Management Program fit into the overall compliance framework of the Bank?

11. How does the bank ensure that its compliance program is robust enough to meet industry expectations and oversight requirements of bank regulators?

12. Who are the regulatory compliance experts on the team – what is their knowledge base in each key area?

bridge the digital divide

Given that all banks today must scramble to make the digital core banking switch, it is easy to understand why banks take so much risk. This is where trust and experience are needed to bridge the digital divide while effectively addressing the regulatory compliance elements of digital core transformation or enhancement. In fintech, this means working with a proven financial services platform that relies on a dedicated product compliance team that understands the complexities of the US banking market.

As you explore the next generation of digital core providers, look for proven vendors that have proven market leadership by combining the power of technology and industry expertise with a strong team of banking-as-a-service and digital banking market experts. Decades of experience in building trust. , Consider a provider that operates faster, smarter and more cost-effectively, working with banks to tackle financial and technical operations services including security, compliance, risk management and customer service alongside intelligent automation .

A level of comfort to initiate core banking transformation can be achieved when working with a market-tested partner who knows that implementing digital core is about a solution that is secure, sustainable, Minimizes business disruption, can co-exist with current operations and is designed with regulatory compliance in mind.

More than ever, banks have a powerful opportunity to deliver reliable, secure, flexible and tailored financial offerings to their customers – all while prioritizing compliance. The first step is asking the right questions to determine which technology best matches the unique needs of the bank and its customers.

Kathleen Yeh, Head of North American Product Compliance Galileo, where he has over 20 years of experience in banking and financial services. Prior to this, he served as Head of Compliance for Poppy Bank and Chief Compliance Officer for Tri Counties Bank. He has previously held senior-level advisory roles in various banks and banking institutions including Wells Fargo, Trilliant, Aurora Bank and Infosys.