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Success in contemporary banking comes down to providing the best consumer experience. People’s banking expectations are higher today than they used to be due to the rapid expansion of consumer technology. Consumers today demand immediate, personalized access to their finances, making it critical for banks to utilize fintech technology to provide the best user experience possible

Effective bank-fintech collaboration is a mutually beneficial partnership that makes it possible to give customers cutting-edge technology for their financial services. Unfortunately, many banks see fintech as competition. This causes them to miss out on valuable opportunities to work together to benefit from joint innovation and growth.  This collaboration between fintech and banks will ultimately bolster their profits and earn customer loyalty.

With fintech and banking partnerships being the way of the future in terms of financial products and services, here are a few tips for ensuring a successful integration.

#1: Identify Prospective Partners With Similar Goals

Choosing the right partner will be a key determining factor in whether or not you achieve your goals. Fintech banking partnerships require finding a company with resources, knowledge, experience, and values aligned with what you need so you can successfully expand your fintech financial services and revenue together. Suppose you are a fintech company wanting to provide faster payments as part of your product services. In that case, you’ll need to partner with a bank with a comparable mission that can partner with you as a payment processor through their network of debit cards.

Banks looking for a fintech partner (or vice versa) should know what they want to achieve with their new partner before making anything official. Knowing your goals for the partnership will make it easier to narrow down the right company and give you more control over the relationship. Make a list of what you hope to achieve with your new partner and identify some potential companies to work with. In some cases, you may need to assess the holes in your operations and then discover ways that a fintech partnership could fill those holes. After you obtain a Mutual Non-Disclosure Agreement, be transparent about the challenges you’re facing so your fintech partner can get the full picture and understand how they can help.

#2: Prepare for the Partnership

When you’ve narrowed down the options of the fintech you want to use, check the company’s scalability and pricing to ensure it can help you grow. Do your full due diligence and risk assessment on your top prospects and be meticulous when learning about their operations, business model, and offerings so you can make an informed and smart decision.

Due diligence is vital when your fintech partner is getting access to sensitive customer data and other bank information. As part of the due diligence aspect, make sure you review the company’s security policies, incident management processes, financial statements, and gather reports of known problems, so you don’t take on any unnecessary risks.

#3: Create a Business Plan Addressing Regulatory Requirements

As with any other aspect of your business, you need a plan for adding new fintech financial services or expanding your financial products. Work together with your fintech partner to develop products and services that are intuitive, functional, and beneficial to the bank and its clients. The plan should follow a traditional business plan format with an executive summary, a company description for both entities, comprehensive market analysis, financial projections, and any legal, state-specific licensing, regulatory, or operational requirements. Having a detailed description of how you’ll meet the requirements before rolling out the new product or services is vital.

#4: Listen to the Way Customers and Employees Respond

Most bank-fintech partnerships are initiated to improve the overall customer experience. For this reason, it’s critical to pay attention to how your consumers receive your partnership-provided offerings. You may need to adapt your products based on customer input and make adjustments until you perfect the product or service you intend to deliver. In the end, it’s usually worth the time and resources that you invest to have these products successful, which results in loyal customers and continued growth at the bank.

Equally important as listening to customers is listening to your employees. Fintech partnerships may appear threatening but should take the opportunity to educate your bankers on the ways fintech can make things easier, quicker, and less stressful. Make it clear that fintech is not meant to replace them but to assist them in serving their customers better by providing unrivaled efficiency. You may end up earning the same loyalty from your employees that you do from customers when you provide them with the tools needed to work smarter and faster.

A Real-Life Example of a Successful Bank-Fintech Partnership

A large Multi-National Bank and Zelle collaboration are among the best bank-fintech partnership examples. The Bank spotted an opportunity when the use of cash began to decline. They decided to expand their digital payment services by making it easy to send, request, and receive payments through the app called Zelle.

Zelle is an app that allows you to transfer money directly from your bank account to the accounts of your friends and family. Unlike Venmo, it doesn’t require a third-party platform to exchange the funds. When the partnership with the Bank began at the start of 2020, over $27 billion flowed through Zelle from Bank customers from over 100 million transactions. The Bank couldn’t have accomplished this feat without Zelle, and they both profited from the uptick in digital transactions.

Fintech partnerships aren’t going away, and it’s going to become more difficult to compete in the finance industry without their collaboration. Now is the time to start integrating with fintech’s that can help you grow and expand.

Contact BMA Banking Systems for More Advice

BMA Banking Systems is dedicated to providing integration of fintech’s to banks and credit unions grow through customized software solutions for every financial institution. Contact us today for further tips in creating a successful banking-fintech partnership by reaching out to our experts today.  Please visit us at www.bmabankingsystems.com or call 801-505-0714.

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Most consumers and businesses have used ACH payments before, whether for recurring payments or bulk transactions. However, while many people have used these payments, they may not know what the payments actually are. BMA is here to help you learn more about ACH payments, how they work, and why you should use them.

What Is the Automated Clearing House?

The Automated Clearing House (ACH) is a network of electronic fund transfers run by the National Automated Clearing House Association (NACHA). This system, handled in the form of payments, relates to various transactions, including:

• Business-to-business
• Consumer bills
• Direct deposit
• Payroll
• Tax payments
• Tax refunds
• And more

The ACH system has been in place since the 1970s and is only used within the United States banking network.

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How Does ACH Work?

The ACH network acts as a central hub of financial institutions that move financial transactions between bank accounts. When a payment is processed, it moves through the ACH network to the final account only after the first account approves the transaction.

There are currently over 10,000 financial institutions that operate as part of the ACH network and they move trillions of dollars in financial transactions every year.

The ACH Process

The ACH process can be broken down into three simple steps.

1. An entity requests to send money from its financial account to another financial account.
2. The ACH network receives the funds from the first financial institution and routes them through the ACH to the final financial institution account.
3. The receiving entity gets the money into its account from the ACH.

The funds transfer from one account to the other quickly and easily with the help of the ACH network.

ACH Payments

The electronic financial institution-to-financial institution transactions that move through the Automated Clearing House are known as ACH payments but are also referred to as ACH transfers or ACH transactions. It should also be noted that these payments can only be applied to bank transactions and not to debit or credit card transactions.

ACH payments are broken down into two main categories: direct deposits and direct payments.

Direct Deposits

Direct deposits cover all types of payments that move directly from a business or government account to a consumer account. Direct deposit transactions include:

• Annuities
• Employee expense reimbursement
• Government benefits
• Interest payments
• Payroll
• Taxes and other refunds

Direct Payments

Direct payment covers the use of funds for making payments. Direct payments can come from either individuals or organizations in order to make payments.

An ACH direct payment can be further broken down into two more categories: ACH credits and ACH debits. The credits are added to the account while the debits are withdrawn from the account.

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Benefits of ACH

Many businesses prefer to use the Automated Clearing House Network for the provided benefits. These benefits include:

• Low costs — ACH payments cost less to process, especially compared to credit card transactions.
• Fast and easy — Since ACH transactions are done electronically, they can be completed faster and easier, including the ability to avoid paperwork that slows traditional payments down.
• Improved customer service — ACH payments are easier for customers, meaning they’ll prefer to work with a business that offers this option.
• Recurring transfers — Customers can set up recurring ACH payments to avoid missed bills or late payments.
• Bulk payments — The ACH network makes it easier to process and manage bulk payments, like payroll.

Disadvantages of ACH

While ACH transactions are beneficial for businesses and consumers alike, there are still some disadvantages to the systems. These disadvantages include:

• Transaction fees — Businesses are responsible for paying a fee for every transaction. While the fee is usually very small, it is still a cost to be considered.
• Fund delays — ACH transactions are not instantaneous. Funds can take anywhere from a few hours up to four days to appear in the receiving account.
• Transaction cut-off times — Financial Institutions can’t process ACH payments after a certain time, which can cause further delays.
• Country-specific — ACH transactions are mainly confined to the United States, with limited capacity for international payments.
• Fund limits — Some financial institutions have limits on how much money can be sent per day, per transaction, or per account.

How Much Does ACH Cost?

ACH payments are free for consumers to use. However, companies and financial institutions need to pay to send and receive these transactions. The median cost of sending and receiving an ACH transfer is $0.29 USD. This low cost is why many businesses prefer to use the ACH network.

There may be additional fees associated with ACH transactions, including:

• Flat fee per transaction
• Percentage fee per transaction
• Monthly network fee
• Batch fee per each batch transaction
• ACH return fee
• ACH reversal fee

ACH transactions are convenient for consumers and businesses alike, but businesses and financial institutions need to be aware of the additional costs.

Need More Financial Knowledge?

At BMA, we understand all the ins and outs of the financial banking industry. We help new and existing banks, credit unions, and other financial institutions make the most of the services they have to offer. Contact BMA to learn more today.

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Phishing is a type of online scam that has been a constant, unfortunate accompaniment to the digital age. Research shows nearly one-third of all data breaches in 2019 involved phishing in one way or another. As online services such as banking become commonplace, phishing scams grow more sophisticated, attempting to catch out even the most computer-literate executives, investors, and employees. But by practicing continued wariness and engaging in top-up education, detecting and thwarting online banking scams and other types of phishing attacks becomes instinctive.

 

What is phishing?

In a covert quest for information, insidious scammers send emails, texts, or calls in which they pose as companies or familiar people. Phishing emails are intended to get the recipient to click on a link or disclose a password, Social Security number, or other useful personal detail. Once scammers receive this information, they can use it to steal the phishing victim’s money, or worse, their entire identity.

 

What tricks are commonly used in a phishing scam?

Some signs that a message is a phishing email are more obvious than others. The most obvious telltale signs are when an email:

Has a link that, when hovered over, reveals a URL that does not relate to the scammer’s claims;

• Appears to come from a company with which the recipient has no account or connection;
• Asks the recipient for private information such as a bank account number or password;
• Has many grammatical errors, unprofessional formatting, or somehow just does not seem “right?”

But other signs of a phishing scam are less obvious. These include:

• A pixelated logo. Scammers sometimes grab a low-resolution logo and include it in their phishing email to make a message appear as if it comes from a reputable source.
• A fake website. A new phishing website launches every 20 seconds. Phishing websites usually use URLs that are similar real websites — for example, Gmaiil.com or LunkedIn.com

 

How can you protect yourself from becoming a phishing scam victim?

Hover over links — but whatever you do, don’t click! When hovered over, some links reveal a .CF. domain name in your browser’s address bar. That stands for Central African Republic — a known source of well-designed online phishing scams.

Two-factor authentication, or 2FA, is one of the best ways to protect your personal or financial information from phishing scams. Once you log into your account, 2FA contacts your mobile phone to verify your identity. You’ll be prompted to either click on a texted/emailed link or type in a number sent by an authenticator app.

Be aware, however, that phishing scammers even try to use 2FA to extract information, using social engineering — exploiting human behaviors and psychology. These 2FA scams set up emotional triggers and other psychological tactics to try to get users to give up personal information.

In a social engineering attack via 2FA, a hacker may already know your username and password and you may be sent a message, such as: “Your user account has been accessed from a suspicious IP address. If the IP does not belong to you please reply with the verification code sent to your number.” Or, they may not know your username and password, so they guide you to a convincing fake website where you input your information, which is then stolen by the hacker, who was waiting to pounce.

 

Email is not the only avenue

Phishing is often associated with email, as that’s how 94% of malware is delivered. But in 2020, we must be vigilant about more than the inbox. Messaging, gaming, and social media apps, all on smartphones, are a hotbed of phishing activity. In fact, this is where 87% of mobile phishing happens. It is critical to use only authenticated accounts.

 

How will your employees react when targeted by a phishing scam?

It’s a matter of time before an organization receives a phishing email. But in its 2020 Phishing By Industry Benchmarking Report, leading cyber-awareness training company KnowBe4 states that nearly 38% of users who don’t undergo cyber awareness training fail phishing tests. Have your employees been trained in detecting and responding to the threat?

 

Phishing During COVID-19

The coronavirus outbreak has provided another chance for scammers to get their foot in the door. In one April week alone, Google reported that it blocked more than 240 million COVID-related email spam messages per day. In 2020, awareness of tactics remains the best form of protection. Training sessions are a wise investment. They involve mock scenarios and simulation hacks, and have become a common, effective way of helping users understand how social engineering and other tactics are used in phishing attacks.

In order for your bank to operate smoothly, it requires accurate and precise core software. As you evaluate your current core software provider, do they provide all the elements your institution needs to be successful? Do you feel your software is on the “cutting edge” of technology that creates a competitive advantage for your bank that can drive new clients to your bank? Does your core software provider offer timely and affordable system customization? If not, it’s time to consider a core conversion or switching your software platform. If you have questions or concerns about switching core banking systems, this guide is for you.

What Are the Main Features That Core Software Systems Provide?

A core system is a centralized software service that handles all your banking operations and transactions. Core software systems should support the transactions your institution needs. Elements of core banking include:

• Opening New Accounts; both online and in office
• Processing Mobile Deposits
• Online Bill Pay
• Customer data and security
• Account updates
• All depository account types such as savings, CDs, checking, IRA’s, etc.
• All lending account types. Such as Secured, Unsecured, Lines of Credit & term, etc.
• All types of alerts, such as fraud, security, limits, and balances
• Daily transactions and proofing
• Reporting, both standard and customized
• Accounting & financial record management
• General Ledger management
• Fixed asset management
• All types of interest management and calculations
• Payment processing
• Statement Processing
• All account type withdrawals
• Compliance; both federal and local
• Debit Card management
• and more

Whatever services your bank relies on to support its clients, it’s essential to ensure those needs are being met through effective and customizable software.

How Can My Core System Work for Me?

Your financial institution has its own specific needs, challenges, goals, and your core software system needs to partner with you to reflect that. As a result, your financial institution will thrive with the most effective system in place by providing, attracting, and maintaining more customers.

In today’s ever-changing environment, financial institutions have a much broader reach than they have had in the past. You can open depository or lending accounts online with the convenience of your smartphone, tablet, or computer. However, to ensure your institution’s operations are competitive and robust, you need to have the right core system in place. The right system can allow you to perform tasks and operations quickly and efficiently. Do you want to simplify your banking operations with the proper core banking software? Learn more about BMA Banking Systems today by visiting www.bmabankingsystems.com or calling 801-505-0714. We have a team in place that will assist you in simplifying the core conversion process.

What Should I Look for When Switching Core Banking Software Systems?

The first step to finding the right core banking software is to evaluate your current system to see if it meets your needs. Next, look at which aspects of your system could be improved. Form a list and prioritize the most important features to create an incredible user experience.  Also, you can form a committee that provides customer input regarding aspects of what they like about your products and improvements they would like to see introduced. After identifying the areas you would like to change, you’ll be ready to compare that list with core software providers.   Ultimately, your core software improvements should be a tool of empowerment, not something set in place to limit your options. If your current system isn’t meeting your needs, it’s time to consider core conversion.

If you feel like processes could run smoother, data could be analyzed better, or operations could be faster, then it might be time to consider switching core banking systems. Compare your newly desired features and benefits so you can effectively evaluate potentially new core providers to achieve your goal of improved operations.

How Can BMA Banking Systems Provide a Solution?

BMA Banking Systems is the ideal core conversion partner for your financial institution. For more than 35 years, we’ve been working tirelessly toward core banking solutions and gaining invaluable experience to help our customers. Everything we do is deliberate and precise. With each partnership we forge, we work to tailor solutions to the needs of each customer and provide the best, most personalized service available.

Our organization works with all sizes of banks to create software solutions that are sophisticated and efficient. The BMA team is experienced, customer-centric, and effective. We strive to provide high-quality services and software solutions that promote growth to meet your metrics and key performance indicators.

If you need solutions regarding core conversions, consider switching core banking systems and partnering with BMA Banking Systems. We’ll make sure you have the right solutions customized to your needs.

Contact the experts at BMA today to learn more about how our services can benefit your organization, and be sure to request a discovery meeting at www.bmabankingsystems.com or call 801-505-0714. We look forward to hearing from you to show you what we can do to take your financial institution into the future.

If a bank determines to review its core software platform, it might decide to perform a software conversion to replace it with a state-of-the-art system. A conversion can be undertaken for several reasons:

• The obsolete legacy system prevents expansion and growth
• The existing platform can no longer manage workflow
• The software has governance, risk, and compliance issues
• The outdated system provides a poor customer experience
• The current platform cannot integrate with other systems
• Disparate data sources reduce reporting and analytic capabilities
• Poor customer service where it becomes more difficult to make improvements
• Costs too much due to either monthly or yearly unexplained increases

What Is Core Conversion for a Bank?

A bank’s core processing software manages all basic banking transactions from deposits and withdrawals to bill payment and loan origination. After conversion, a bank can expand its service offerings, increase the availability of funds, and fine-tune the customer experience.

Most of the changes won’t be apparent to customers. Account numbers, passwords, balances, and account information will remain the same. Nevertheless, customers may notice new and improved features with their online or mobile banking

What Is a Bank Conversion Benefit?

With the flexibility presented by a core upgrade, a bank can offer products and services that are fully customized to meet the demanding needs of customers.

The case for software conversion became crystal clear during the pandemic. Homebuyers, title companies, banks, realtors, credit unions, and notaries needed technology to keep the housing market up and running. However, obsolete core systems severely limited the services and support that bank provided.

The demand for core conversion wasn’t limited to the real estate industry. Bank customers demanded to open depository account and start loans, all online.  New capabilities were also required to close mergers and acquisitions. Additionally, bank conversions were necessary to foster digital engagement with customers and thereby enhance the customer experience.

Why Is Conversion So Important Now?

Technology doesn’t sit still, and as it expands; it imposes obsolescence on technology that is antiquated. The great majority of banking platforms are obsolete. However, before the pandemic, they were still functional enough to satisfy the needs of most customers.

The pandemic has raised the stakes to create more online and digital services and products that won’t require bank customers to physically walk into a bank. Now, banks must update their core systems to keep up with the demand for remote capabilities.

Legacy System Limitations

Legacy software systems are outdated software & hardware systems that are still in service. The needs that it fulfilled when it was created were applicable back then but are no longer being met today.  The Legacy software is unable to expand and satisfy the new needs of bank customers today. It can’t interact with newer systems, and because of its inherent limitations, it prevents a bank from making product and service upgrades. To make matters worse, the maintenance that legacy systems require is time-consuming and expensive.

The Problem with Legacy Systems

Obsolete operating platforms can cause trouble. Data silos prevent the integration of information when that information can only be accessed by certain departments and is inaccessible to others.

Legacy systems can wreak havoc on compliance with government regulations, and obsolete platforms are vulnerable to attack by cybercriminals. At some point, the cost of maintaining an obsolete core will become greater than the challenges of conversion.

Maintaining obsolete software can be expensive to maintain. Although all computing systems require proper maintenance to perform optimally, legacy systems need excessive maintenance. It’s like trying to maintain an old car, it seems like it’s always in the shop for repairs.

Ongoing maintenance is the only thing that keeps old systems up and running. Meanwhile, outrageous maintenance costs generate little ROI.  Eventually, these systems lose all support as updates are discontinued. If the system fails, you’ll have a major mess on your hands.

Why is Core Conversion such a big decision for a bank?

Whether or not to initiate a core conversion is not an easy call to make. Here are some of the reasons why banks are reluctant to take this critical step:

Costs

Undertaking a conversion process requires commitment and dedication. It also necessitates a large upfront cash outlay to cover the considerable costs of material and manpower.

Banks are historically conservative institutions. They want to be reasonably certain that their ROI will be worthwhile.

Resistance

It’s not easy to upgrade an entire banking system. It takes a significant amount of time, attention, and cooperation to get the job done right without disrupting the operations of the bank.

Employees and managers alike can feel frustrated, resentful, and confused by the steep learning curve they are confronted with as the upgrades are being implemented. That can lead to internal strife, stress, and resistance.

Challenging

It can be challenging to find people with the requisite skills to complete a conversion. Some legacy systems were constructed using an obsolete programming language that is obsolete and does not allow for smooth integrations into other valuable banking services.

Migrating data from an old system into a new system needs to be carefully transferred to the new core and some data can be lost if not indexed correctly.

Benefits of a Core Conversion

As formidable as a core conversion might seem, it can still proceed with minimal disruption when you partner with experienced professionals, like BMA, which has over 35 years of experience. The entire process takes between six to nine months to complete, although some conversions can take longer.

Much of the work is done by the new core provider but the bank is very involved in making sure that the products/services promised are being delivered.

A new core operating system will transform the banks’ ability to be more competitive with banks that have already converted to the newer technology.  Products such as digital account opening at the convenience of your tablet, computer, or smartphone are becoming the new norm.  Advanced reporting capabilities and clean data result in a system that’s efficient, expansion-friendly, and primed for growth.

Contact BMA to schedule a free introductory call, discovery meeting, and consultation regarding how improved technology will improve your bottom line.  www.bmabankingsytems.com.

Advanced technology in the banking industry has made transactions safer, faster, and more efficient for banking staff as well as customers. Gone are the days of manually processing checks and transactions. Core banking systems empower banks to create streamlined, centralized processes across every branch in their system, improving customer experiences and strengthening internal infrastructure.

What Is a Core Banking System? 

A core banking system is a centralized back-end system designed to process and support transactions across branches of banks. At the front end, a core banking system offers all the services customers and banking professionals need to handle finances. On the back end, a core banking system processes data securely and reduces the risk of fraud.

Besides adequate funding and strong management, what all banks need is a core banking system. They provide the essential services a bank needs to keep data and savings safe, and at the same time, providing an optimal user experience for customers. A core banking system generally includes these main services at the heart of most banks:

• Processing deposits and withdrawals

• Managing new accounts

• Calculating interest

• Servicing loans

• Managing customer accounts

• Processing checks

• Keeping records

• Managing fraud and risk

What Are the Benefits of Core Banking Systems? 

Before innovations in banking technology, bankers had to manually calculate interest and manage customer records. As the internet has become commonplace, banks needed to utilize software that could keep customer data secure and automate many of these manual banking processes. Core banking systems bring everything that banks need to carry out essential operations, cutting down on manual work and helping banks provide services necessary in the 21st century.

• Uniform experiences across all branches. Core banking systems make it easy for banks to provide uniform experiences at every branch of a banking system. This means that a customer can expect the exact same experience at an ATM at any branch location across the country — or even across the world. Core banking systems can also translate this uniformity to online and mobile experiences, ensuring simplicity and security while depositing checks, transferring funds, or checking account balances.

• Customer empowerment. These days, there is less dependence on manually balancing a checkbook or writing out a budget. Core banking systems empower its bank client’s customers to know exactly what’s going on with their money and to access that knowledge with a few taps on a smartphone or tablet. Customers have the freedom to conduct their banking according to their individual preferences. This can mean faster payment processing and accessing services round-the-clock.

• Stronger banking infrastructure. Core banking systems exist not just to improve user experience and uniformity, but also to organize internal banking operations. This can be helpful for banks looking to improve performance and save costs on manual banking, but can also be a solid foundation for De Novo banks looking to start strong. Banks run less risk of human error with core banking systems, improving documentation processes and customer retention.

• Regulatory compliance. The banking industry is, of course, highly regulated. Banks need to meet certain government standards to operate on a national scale, and core banking systems can help them do this. With a focus on fraud prevention and risk management, core banking systems ensure that customer data and funds are safe and internal employee operations are standardized and transparent.

• Security and risk analysis. With so much customer data living in bank’s systems — and ever-present hacking threats — banks need to implement systems for risk analysis. Every aspect of a bank’s operations, from depositing checks to withdrawing cash, needs to pass through a system of risk analysis. This oversight prevents fraud, keeps customer data secure, and mitigates risks before they turn into serious problems.

 

Finding the Right Core Banking System for Your Bank

There are many core banking systems out there, some of which are built for massive banking institutions, and others for de novo banks and smaller systems. When you look for core banking technology for your bank, there are a few factors you should consider:

• The company’s experience in the banking industry

• Specialization — compatible with large, medium, or small bank systems

• Range of products and services

• Clearly identified de-conversion fees, if you decide to move from one core to another

The ideal core banking system should be able to handle however many transactions that occur across all branches of your banking institution. It should be able to support every service your customers expect, including deposits, loans, and online accessibility. Whichever company you choose should have plenty of experience in the banking industry, ensuring that your needs are met and your data stays secure in the face of future challenges.

BMA Core Technology is a leader in core banking systems, providing innovative, intuitive software for banks of all sizes. With close attention to customizing the system to your needs, customer support and a strong background in security, BMA can ensure your banking services go smoothly while your information stays safe from potential risks.

Contact BMA Core Technology to request a demonstration and to learn how core banking technology can improve your bank’s operations.

Core banking is vital software that keeps bank systems up to date in providing the latest feature and products that customers depend on and expect. Because of the vast competition between banks and credit unions, customers have options in selecting a financial institution that best meets their needs.

If you are wondering what core banking is, what the software can do, and how it can help your bank or credit union, read on to learn more.

What Is Core Banking?

Core banking is a behind-the-scenes software system that handles a variety of banking transactions for the bank and its clients. It processes daily transactions from credit and debit cards to online and mobile purchases or payments. You can receive monthly statements, tax reporting and manage your accounts through money management tools. A core provider can conduct processing services for deposits, loans, general ledger, IT as a Service (ITaaS), and much, much more.

Core banking software also connects all the branches of a bank, ensuring customers can visit any bank branch and still access their account and needed services. This also applies to mobile banking, which allows customers to complete banking transactions anywhere and at any time.

Core Banking Software Capabilities

While core banking software makes banking more accessible for customers, there are several reasons a core provider can be beneficial to your bank or credit union as well. Core banking software capabilities include technology integration, expansion scalability, digitized banking, customized solutions, resource services, and strategic collaboration.

Technology Integration

A core provider should have software that enables seamless integrations to your existing system and third-party providers. This is done through open banking or APIs (application programming interface), which facilitate communication between two separate systems that wouldn’t be able to communicate otherwise. An API also safeguards information between each system, determining which is necessary for both sides.

For banking institutions operating with older software systems, an API in core banking software bridges the gap between new and old systems. This helps them operate more efficiently, function faster, and last longer. Technology integration also helps banks and credit unions avoid costly, time-consuming system overhauls when old processes stop working.

Expansion Scalability

A core banking software provider must meet current customer and institutional needs. That’s what makes them a vital software addition for any banking provider. Yet, technology is continually changing and improving, meaning bank services are being digitized — or created — all the time. Core banking software must have the ability to expand or scale services as your bank grows.

When core technology is flexible and expandable, you can easily add new services, streamline existing processes, and provide a better experience for your customers that is faster, easier, and more productive.

Digitized Banking

Most people handle banking transactions from a personal computer or mobile device. This means your banking services are easily accessible online. With the right core software provider, your customers can complete money transfers, open new accounts, apply for loans, or even begin the mortgage application process  on your phone or computer, making banking tools and access to loans/deposits quick and easy

Customized Solutions

If your financial institution specializes in mortgage loans or checking accounts, you may not need optimized solutions for credit cards or other services. A core banking provider can customize solutions to your institution’s specific needs without paying for products that you do not need or want.

Resource Services

Core banking software can feel overwhelming if your employees don’t understand what the software can do. Your core banking provider should offer learning resources to help banking professionals make the most of the software. You can work with your core provider to develop employee training sessions, oversee internal projects and programs, implement high-quality management plans, and create test strategies for future system use.

Strategy Collaboration

If you want to grow your banking services but aren’t sure where to start, a core banking provider can help. You’re creating a partnership where ideas can be exchanged, and new processes can be planned out. You’ll be able to stay on top of current market trends, discover new banking technologies, and monitor what your competitors are doing so you can match or exceed their services.

Additional Core Banking Software Features

You need a core banking provider that meets your institution’s needs. This means researching current providers and identifying one that most closely matches what you’re looking for. Here are some additional main features and capabilities that your core banking software may include.

• Open new accounts such as checking, savings, or CD’s
• Complete a loan online without having to step inside the bank
• Online bill pay
• Process mobile deposits
• Provide account updates
• Receive alerts on credit or debit charges
• Turn your credit or debit card on or off using your smartphone
• Maintain customer security
• Customer money management tools
• General ledger management
• Interest management calculations
• Stored customer data
• IT as a Service (ITaaS)

You can learn more about finding a good core provider here.

Why Choose BMA for Core Banking Software?

At BMA Banking, we have over 35 years of experience providing innovative and reliable core software solutions. Our customer service is first-class, and we listen and act to achieve your needs. We are precise and deliberate in everything we do and strive to provide tailored services that meet your needs.

Our client services include a personally assigned account executive that is experienced and will provide problem-solving solutions. With BMA Banking as your core provider, you can trust that we put you first every time. Request a discovery meeting with our team to learn more today or call 801-505-0714.

The computational needs of a financial institution are difficult for the human mind to fathom. Not only are there impressive numbers to keep track of, but all sorts of customer metadata, point-of-sale software for employees, online banking applications, and much, much more to keep straight.

It likely comes as no surprise that making changes or upgrades to a bank’s software system — through a process called a “core conversion” — is daunting and challenging to undertake.

To better understand how a successful core conversion is completed, we will detail the high-level process your company needs to carry out to make it happen. But first, let’s get a better handle on some important concepts.

What Exactly Is a Core Conversion?

The core processing system is the complex web of computer language and systems that a bank uses to carry out its business. Included under this umbrella are all the major systems like ACH transfers, general ledger, fixed assets, depository, lending, digital account opening, online & mobile banking, and other essential functions to serve bank customers while meeting all State and Federal Laws and Regulations.

Even for a smaller local bank, the sheer amount of data that a financial institution deals with daily is complex. To store and compute that much data — especially data as sensitive as financial information — banks need powerful servers to ensure timely processing and provide a high level of compliance and data security.

The challenge is that most banks can’t afford to run and maintain their own onsite farm of servers while also conducting their daily business. That’s why most banks forgo running their own core processing and choose to outsource these tasks to the core software providers.

A core conversion becomes necessary when a bank grows and changes, requiring additional functionality or an improved level of service from their own cloud services and own onsite farm servers. In these circumstances, the bank will need to take great care and effort to ensure that all files and programs are migrated from their incumbent vendor to a new, better-matched vendor that gives them the opportunity to grow and expand with new products and processes.

Keep in mind that conversion is not a simple process. It will take months of preparation and work between the bank and the new core software provider. With the help of the new provider and a team from the bank, you will be able to determine the answers to key questions, like:

• Is the existing system compatible with the new host?
• What potential adjustments will be needed to ensure compatibility?
• How can possible damage or corruption in the system be avoided or mitigated?
• What measures do you still need to take after moving the system?
• How and who will train the bank employees on the new software
• What new programs will be introduced to the bank’s clients and how will the bank announce these enhancements

Along with others, these will be critical questions to answer on the road to an upgraded system under your new core provider. The process of core conversion, while rewarding, needs to be entered into with the understanding that it is a specialized project that requires the supervision of qualified professionals.

Why Do a Core Conversion?

As stated before, a core conversion is a huge undertaking, and banks should start these processes with that expectation in mind. A complete core conversion will typically take in the realm of 6 to 9 months from start to finish. Additionally, it’s essential to know that outgoing core providers may charge the bank de-conversion fees to disincentivize switching. There comes the point, however, where, paying the fee makes more financial sense for a bank to leave their provider to be more aligned with the bank’s goals and objectives. Core conversion is an unavoidable part of doing business if you hope to grow and innovate.

In most situations, banks make the switch to a new core provider for the simple reason that their current core isn’t meeting their needs anymore. Either the current provider doesn’t support the technological capabilities the bank is striving for, or there’s another provider out there that provides a similar benefit but is more cost-effective in the long run and provides a higher level of customer service.

6 Steps for a Successful Core Conversion

1. Assemble Your Conversion Team

Knowing that a conversion is an extensive long-term process, it should come as no surprise that teamwork is vital. No single individual in your company should be tasked with overseeing the core conversion.

To successfully complete an effective core conversion, you must bring together a strong team that is responsible for the internal tasks and projects that need to be taken care of in the leadup to and during the conversion. The team will ensure that the most critical aspects of your business, like accounting, compliance, consumer-facing transactions, and technology applications, are all well-organized, and plans are in place to keep them going strong during the changeover.

Make a point to consult with your staff on their day-to-day tasks and outcomes, especially those responsibilities that require them to use the core system. In doing so, you provide your conversion team with a better set of priorities regarding which functions are most important for the bank’s continued operation, showing the team where they need an extra level of care to minimize bugs and outages.

2. Thoroughly Research Your Vendor Options

At this point in the process, your conversion team will need to take a detailed look at the vendors available and appraise their various tools and limitations. There are many different core processing vendors for banks to choose from, and they each have their pros and cons. Have your conversion team meet with as many of these vendors as possible to discuss compatibility. This gives your team the information they need to compare each vendor’s offerings and provides a better understanding of what options of systems, customer service, and pricing are available.

3. Decide on a Core Vendor

Once the initial vetting of vendors has taken place, the conversion team, executives, and board of directors should carefully deliberate over the options your bank has. Resist the urge to wrap up the decision-making in a single session because this decision will have a far-reaching impact.

Once the conversion team and any other relevant stakeholders have had a chance to comb over the data, make a group decision that prioritizes the core vendor that is most aligned with the bank’s goals and growth strategies. If you keep in mind your long-term goals and understand the tools your bank will need to accomplish them, the right vendor will become more apparent.

4. Commit Specific Employees and Their Work Time to the Conversion

Up until now, the conversion team has been in planning mode, but now that it is time to put those plans into action, you’ll need to expand the team. Involve any internal departments or key individuals who will need to change focus for the conversion process.

It’s important to remember not to overload these individuals if they have other business-critical tasks on their schedule. You shouldn’t just add the new conversion duties onto their already busy day. Ensure that you designate specific people an appropriate amount of time to get things done.

You will also want to allow your internal conversion team to work in conjunction with the core vendor’s corresponding implementation team, which will keep essential tasks from getting forgotten.

5. Train All Staff on the New System

Implementing an entirely new core platform will bring changes to your bank’s workflow, and your employees will need time and assistance to get up to speed after the move to the new core software provider. To minimize downtime in the changeover, prepare your employees for their new work environment by providing a test system with the new core provider. Training on the new processes will be mandatory for all individuals whose work brings them into contact with the core system. This will quell any growing pains and improve the basic knowledge and understanding of the entire team.

6. Get Ready for the Changeover

Constant communication with your new core vendor is vital to make the final decisions and arrive at a reasonable date to roll out the new software system. Your internal conversion team and the core vendor’s implementation team should have a forthright and open conversation to set the critical deadlines and expectations. It will also be helpful to discuss any possible challenges that either team should expect as the process unfolds. Especially as the conversion date becomes closer, make sure that your internal team stays flexible and ready for any hiccups and can assist the implementation team at a moment’s notice.

Make the Change with BMA Banking Systems, the Core Conversion Experts

For banks looking to upgrade their core processing systems, BMA Banking Systems is a leader in the core software industry. With over 30 years of providing core processing solutions for banks, BMA has the experience necessary to tailor solutions to your bank’s individual needs, ensuring that your system is dependable, innovative, and cost-effective.  To schedule a discovery call, go to www.bmabankingsystems.com or call 801-505-0714 today.

Financial institutions require powerful technology solutions that can keep up with ever-changing client needs. Patrons expect their banks and credit unions to offer a full suite of digital services, and financial institutions need a core banking software that prioritizes speed, flexibility, and security.

Given the amount of core banking platforms in existence, choosing the right one can feel paralyzing. There are some steps financial institutions can take to ensure they select the one that meets all of their needs.

Determine your needs

You should have a general idea of what services your financial institution needs before you begin choosing a core system. If you already have a core banking platform in place, then you should start the selection process by performing a gap analysis. Assess what is working with your current software, as well as the functionality that is missing. This assessment helps you know what to look for — and what to avoid — in your new processing system.

Evaluating your software needs will help you better conduct software research. You’ll be able to ask educated questions during product demos, instead of just seeing the features and services the vendor thinks are important. List all of your reporting requirements and the minimum level of customization you are comfortable with ahead of time. Make sure your requirements are explained in detail and that they include both the data requirements and the processing requirements.

Prioritizing the needs and wants for your institution is also critical. Which technology functions or support capabilities are an absolute must, outweighing any other features? When choosing between multiple software options, your priorities will help guide your decision.

Perform preliminary vendor research

Now, it’s time to start gathering basic information about your vendor options. Compile a list of software options that are suitable given the size of your financial institution. Then, start digging. You need to know the general functionality of each software option, but you don’t get too deep in the weeds. More specific questions about the functionality will be answered during proof-of-concept workshops.

When it comes to discovering and comparing the cost of the software, make sure you know the complete cost, including any hidden fees or assumed costs, including internal resources.

Here is an example of what you might look for as you research core processing system vendors:

• Customer Service Availability
• Functionalities
• Cost
• Performance
• Safety and security
• Program management
• Flexibility
• Open System Architecture
• Customization options with Cost and Timing Structures

You also want to know the future prospects of the vendor, because you should plan on partnering with the vendor for a while. Look for features that you don’t need now, but you might in the future, and ask the vendor about any future plans and the process for system enhancements. After you complete your research, your vendor selection list should be trimmed down.

 Test Vendors

Put the software to the test to make sure it meets all of your requirements. You can either do a proof-of-concept or a test system pilot of the software. During this step, you should ask questions about how the core processing system is designed so you can coordinate an implementation plan with your current IT set-up.

During this time, you should learn more specific information about the functionality and operational performance of the software. Be sure to gain a good understanding of the software and how it fits into your financial institution.

Finalize Your Selection

Once you have culled the contenders to two or three vendors, you’re ready to make your selection. Revisit the requirements that you wrote at the start of the process, making sure that all of your needs are met. Assess the technology, pricing, implementation plan, and any other decision factors.

If your financial institution is switching from another core banking software, ask about the timing and de-conversion costs from you contract.  A flexible service oriented and simple implementation process can be extremely beneficial and might sway your decision.

After all of the research and testing, you are ready to make a decision and start work on implementation. You need to make sure you allow for a minimum of 6 to 9 months for this process.

BMA  provides innovative core processing solutions, open architecture and top-quality customer service. Our software solutions help banks, credit unions, and ILCs stand apart from their competitors and serve their customers. To learn more about our software solutions, visit https://avalaunchsites.com/bma/solutions/.