Digital technologies threaten to disrupt the banking industry, forcing financial institutions to adapt or replace legacy systems at an uncomfortable pace. But, it isn’t the technology transformation alone that poses a risk. These changes require data conversions that are too often time-consuming and error-prone processes.  Robotic Process Automation (RPA) software programs may be the key to smooth, error free conversions – removing one of the biggest roadblocks to bank technology transformation.

According to a 2016 NTT DATA Consulting survey, ample justification exists for banks to upgrade their systems:

  • 70% of banking executives expressed frustration with their core deposit system
  • 100% said their institution’s core system posed at least one major challenge
  • 29% cited the cost of maintaining legacy systems and the complexity of integrating with other systems as major core challenges

Technology transformation and the bank data conversion that comes with it are not for the faint of heart. There are many factors that can prevent, slow or sabotage success. Are your boss, budget and schedule in sync? Might your vendor hold your data hostage with exorbitant de-conversion fees? How detailed is your plan for go-live weekend, including system outages, and post-conversion cleanup? These are weighty, if not troublesome, questions for a financial operations manager and his or her IT support.  They don’t call it digital disruption for nothing.

Costly Conversions

Daunting and costly, though major, bank technology changes and the related data conversions are hard to avoid. Core data conversions are warranted when a bank expands quickly, its system of record becomes outdated; and/or the necessary system patches and middleware become too costly.

In fact, data conversions not only carry a financial cost they also bring with them a high-stress cost for the team responsible for the change. During conversion projects, data must be migrated and multiple processes must be completed, such as notifying account holders, cleaning up data and reporting.   Core vendors convert at the programming level, which means system downtime and that bad data could pass through the migration, too. It also means that when a bank starts its conversion or go-live weekend, everything has to run in 48 hours — accounts, funding, balances and more. Like a student before final exams, the project manager isn’t likely to get much sleep that weekend in order for the financial institution to reopen its doors for business Monday morning.

Data Conversion’s New Best Friend

There is an alternative for financial institutions, whether changing to a new core system or acquiring a new bank or branch. By building the necessary input files for the target system, Robotic Process Automation (RPA) software eliminates the need for a costly de-conversion file. This reduces an institution’s costs by as much as 80 to 90 percent because the source-system vendor, which mainly focuses on new business, can no longer dictate de-conversion terms to a captive audience. Data is retrieved from report writer applications and/or query tools.

RPA software handles the de-conversion before the new target system vendor does the conversion. It can also perform the data conversion itself. The software works at the application level, rather than programming, so there’s no system downtime and no post-conversion cleanup. Without RPA’s cleanse and data validation, the traditional approach could take weeks, even months, because of the way the core vendors process the data, (A big piece of the post-conversion cleanup is duplicate customer records.)

Bank data conversions are a huge undertaking for financial institutions, but a worthwhile one when you consider that 78 percent of bank IT budgets go toward maintaining legacy core systems, according to the NTT DATA survey. RPA software allows banks to speed up the system conversion process, avoid major expenses like de-conversion fees and maintain the integrity of their critical information. With RPA, it is even likely that, in the midst of digital disruption – during the harrowing conversion process – the team responsible may even get some sleep.

For more information, read our use case, “Foxtrot’s Use In Operations.”

Download  Foxtrot's Use in Operations