More than ever before, the competitive landscape of customer acquisition amongst financial institutions have been fierce. Currently, banks at the forefront of the market are making use of fintech partnerships to enhance their digital offerings, and become more efficient, thereby increasing market share and revenue. A report by Finastra stated that 60% of Microfinance institutions (MFIs) and Credit Unions (CUs) don’t have a core that is agnostic enough to partner with fintechs. If more MFIs and CUs do not future-proof themselves to become more competitive, they risk loosing customers to digital banks and other traditional financial institutions.

The dynamic expectation of customers have been influenced by efficiencies of institutions in other sectors such as Uber, Amazon and so on. They expect same experience when engaging with the offerings of financial providers. However, the problem is that most MFIs and CUs are yet to change their legacy core banking system that may have been designed as far back in the 1980s with limited functionalities that cannot meet the expectations of today’s customers or enable the realization of digital transformation.

If you are a MFI or CU executive, the risk of not acting now far out ways taking decisive steps. Top on the list is that you might end up loosing your customers to more efficient competitors or run out of business. What you need is a core system that will help you to not only meet your customers’ expectations today but also meet their future needs. An open cloud-based core system provides speed of innovation and unlocks the power of your data to proactively engage in personalized value-added ways not thought before. It should help you stay relevant in the market, grow your business and extend your operation into the future.

Value provisions of cloud core systems:

  1. The core system will help you launch new business model that may result in opportunities for revenue generation, and expansion.
  2. It is flexible and support integration with Fintechs systems. It is built on modern technologies that can enable the easy realization of digital transformation. It’s all about the customer experience. Members want ease of use, smooth operation simplicity and personalization and.
  3. It should support the offering of end-to-end lending products and open APIs.
  4. Provides high availability and unrestrictive service delivery model: You can partner with Fintech to effectively maximize deposits or lending business opportunities in different location with less resources and overhead cost. A cloud core system, enables you to deliver services in highly efficient manner, using a cost effective model.
  5. Security capabilities: It uses web security and encryptions. It eliminates the hassles dealing with the security of data centers or worry about availability and uptime. Security capabilities are, of course, a key priority of every institution in the financial industry.
  6. Scalability: Having adaptability at its core enable core systems to be easily customizable to meet increasing requirements. It provides easy access to data in order to find opportunities for organic growth and increase loyalty, proactive actions and automate business processes.

An effective way to increase market share is to always strive to meet customer needs by delivering efficient services. With a legacy core system, opportunities experienced at specific branches or branch will not be maximized as it will be faced with limitations. Overhauling the system will enable you to consolidate growth opportunities from all branches irrespective of the location.

To Conclude

The benefits of using cloud core systems are immense. This is why many financial institutions are taking action in order to remain competitive and derive optimum benefits that will be visible in the short and long term. AHEAD banking is a flexible core system with on-premise and cloud offerings built to enable you realize your digital transformation plan.  What are you waiting for? Make the right move today. Contact us now.