Top 4 Reasons to Consolidate Systems into a Unified Platform

Around 50% of financial institutions (FIs) admit they’re still in the early stages of digital transformation initiatives. Of the small percentage of banks that say they’ve undergone a digital transformation, just 30% report successfully implementing their digital strategy—the rest miss the mark on their objectives.

So, what’s slowing the pace of transformation and keeping the desired outcomes out of reach? In a word: complexity.

The tech stack within most FIs has accumulated over decades, leading to an impossibly complex architecture and significant technical debt. Meanwhile, banks and credit unions operate in functional and technological silos that hinder the necessary interdepartmental coordination and collaboration.

The good news is banks and credit unions can address this complexity by consolidating systems into a single platform. We’ll walk through the most compelling reasons FIs should consider this approach, but first, let’s dive into the factors that drive system complexity.

The competitive disadvantage of unchecked complexity

From regulatory compliance to ever-evolving customer expectations, the day-to-day demands placed on banks and credit unions require robust technical support. Over time, the solutions adopted to serve a specific function weave a tangled and rigid web.

Beyond financial software, such as core systems and loan origination solutions, FIs are also left managing a growing body of enterprise applications, with the average company using more than 200 applications across all departments.

With this patchwork of systems now standard in the financial services industry, it’s little wonder that 90% of FIs’ IT budgets go to maintenance—and even less surprising that digital transformation initiatives stall as a result.

Still, as new market entrants like fintechs accelerate the pace of competition, banks and credit unions can’t afford to settle for the status quo and rely on disconnected systems. Unifying systems is imperative to staying competitive.

4 reasons to consolidate systems into one platform

FIs must address infrastructure complexity to secure long-term success; the most efficient and effective way to do that is by consolidating systems into one easy-to-use platform, such as an iPaaS solution.

While the reasons to simplify complexity through consolidation are myriad, four benefits stand out:

1. Improve member and customer experience

By consolidating systems, institutions can offer seamless and personalized customer experiences across various touchpoints. When data is shared in real time across all systems, FIs avoid delays and inefficiencies that frustrate customers.

Whether opening an account, applying for a loan, or seeking assistance, customers benefit from faster response times and consistent service delivery when systems communicate through a single, consolidated platform.

2. Cost savings

Managing and maintaining a multitude of systems is costly and time-consuming, evidenced by the fact that the vast majority of IT budgets go to maintenance. Consolidation allows institutions to rationalize their technology stack, leading to cost savings and better resource allocation.

What’s more, the operational efficiencies gained through system consolidation can lead to secondary cost savings across the business.

3. Eliminate data silos

All too often, different departments within a single FI are operating from different data sets due to long-standing organizational silos. This hinders efficiency and sows dissatisfaction among members and customers while leaving the organization vulnerable to errors and compliance mistakes.

With one platform serving as the connective tissue between all systems and applications, the walls of hardened data silos fall away. And with solutions like iPaaS that are capable of real-time automation, you can easily foster a sense of synchronization across the entire organization.

4. Cut unnecessary manual work

A unified platform streamlines workflows by providing a centralized repository for data and processes. This, in turn, eliminates the need for manual data entry and reconciliation across multiple systems, freeing staff to focus on value-add initiatives rather than rote tasks.

Consolidating systems to simplify complexity

Exceedingly complex operating environments have become standard in the financial services industry, but to achieve the strategic objectives necessary for success in the modern landscape, consolidation is key.

Rather than settling for an unmanageable maze of systems and applications that stunt growth and put goals out of reach, connect systems through one simple platform to step into a new era of digital transformation as a unified organization.