Getting The Most Out of Your Core Technology Stack in a Data Driven Market (Even If You Have a Legacy Core)

In a financial market where margins are tight, competition is relentless and customer behavior is increasingly transparent, institutions that learn to fully leverage the data already embedded in their core technology stack gain a decisive advantage over those still relying on yesterday’s reports and mindsets. Moving away from an “order-taking mentality” to a data-driven, strategic approach requires using today’s technology more intentionally.

“Legacy Core” Is No Longer an Excuse in a Data-Driven Market

Nearly every community bank operates on a legacy core, but that doesn’t mean they must be stuck in the past. Research affirmatively shows that competitive advantage can still be achieved depending on how well banks extract, analyze and act on data.

In its recent product assessment report, Transforming Banking Through Data and Analytics, the American Bankers Association emphasized that banks are sitting on vast amounts of customer and operational data, yet many struggle to convert it into actionable insights.

Why?

For one, data remains siloed across core and ancillary systems. It’s difficult to “get at” the data needed to answer the most pressing business questions in a timely way. In addition, many community banks are still relying on static, historical reports to make decisions, and a lot are making decisions by gut instinct alone. Doing things “the way we’ve always done it” can put institutions at a disadvantage compared to those using analytics to anticipate rapidly changing customer needs and market shifts.

Technology can be the key to both opening silos and producing meaningful analytical reports that drive smarter, more strategic decisions.

“For decades, bankers have been tech fearful, and many still believe tech is for IT only. It’s not,” said Mike Neale, PRI Director of Systems and Automation. “Many in the industry still use the basic green bar reports that get them from here to there operationally, but they’re not utilizing technology to give them strategic or tactical insight. They will be the ones left behind.”

Leadership Must Own the Core and the Data

The ABA makes clear that successful data initiatives require executive championing, with leaders treating data literacy and technology fluency as core business competencies. They point out that cultural resistance—not technology limitations—is one of the most common barriers to effective data and analytics adoption. Neale agrees.

“There is absolutely a cultural problem anytime there is a lack of curiosity and drive to get the insights we need,” he said. “Leaders must say we’re not going to accept the outdated practice of foregoing data to drive business decisions. If the core is not giving you what you need in terms of data extraction, don’t give up. Try another way.”

Start with the Right Questions, Not More Reports

ABA research stresses that analytics efforts should be driven by business questions tied to profitability, growth and customer retention—not by routine reporting habits. They encourage banks to align analytics initiatives with defined business goals, rather than generating reports that are never acted upon.

When thinking about data extraction and reporting, PRI Data Engineer Leslie Unrue advises her clients to begin by stepping back and thinking about what questions they want answers to and what problems they need to solve. Focus the organization’s efforts on defining what information drives profitability. 

“We check data reports every day because that’s what we’ve always done, but do we use the information to accomplish our organizational goals? What problems are we trying to solve?” Unrue said.

Turning Raw Data into Meaningful Insight Through Visualization

Neale said the banking industry has a long history of trying to achieve insight by looking at reams of text-heavy data, but research confirms that modern data visualization is critical for helping decision-makers quickly interpret complex information and spot trends. ABA research shows that visual dashboards improve comprehension, accelerate decision-making and make insights more accessible to everyone.

With a wide variety of data visualization tools now available such as Power BI, Tableau, Cognos, Google Data Studio or similar business intelligence tools, teams can present timely data in an easier-to-consume, more meaningful way.

“Some data can be consumed in text-based reports, but it becomes much more obvious and intuitive when seen visually,” Neale said.

Fully Leveraging Core and Ancillary System Capabilities

Neale said most core systems have sufficient reporting capabilities built in or capabilities that can be added on to extract the data needed to provide meaningful insight. However, it can be a cumbersome process for some core systems to play well with others in the sandbox. In that case, external solutions may be the answer. Proceed with caution, however, and ensure that you fully understand the core capabilities before investing in new platforms.

“Don’t always go the outside route—your core system often can do what you need. You just need to understand how to use it,” Unrue said.

To increase understanding of the core, avoid common pitfalls and shorten learning curves, Unrue recommends seeking out knowledge sharing through user groups and industry events. Take advantage of the vendor’s core system training, which is frequently included with the organization’s investment. Build relationships with other bankers in the institution’s peer group to share experiences and offer and receive help. Finally, build relationships with core and ancillary vendors at both the individual and organization level. Exchange information with vendor representatives at conferences and don’t just talk to them when resolving support tickets. Leverage those conversations to improve system utilization. Draw on their experience to increase your breadth of knowledge about the core system and how to make it work best for you.

Staffing for Data Curiosity and Analytical Thinking

The ABA identifies talent and skills gaps as a major challenge when tackling a data-driven initiative, particularly for community banks without dedicated data or IT teams. But you don’t always have to hire a purely technical skills mindset. The report highlights the growing importance of hybrid role-individuals who understand both banking operations and data analysis.

The Covid era demonstrated to community banks that when talent with this unique blend of skills is tough to find locally, remote work opens brand new opportunities and possibilities. Neale recommends that leaders gut check themselves to ensure they are staffing their organization with people who understand data visualization and reporting and are willing to figure out how to answer complex business questions with data.

“We’ve found natural curiosity will drive the most success in the long run. You can train people on the technical aspect,” Unrue said.

Adaptive Capacity Is the Real Differentiator

Consistent with ABA findings, lasting value from data and analytics depends less on tools and more on leadership’s willingness to drive sustained organizational change. Banks that embed data-driven decision-making into daily operations outperform their peers who treat analytics as a side hustle.

“Change is hard and must come from leadership at the top,” Neale said. “There are many opportunities to have better insight than your competitor even if you’re running a legacy core.” The institutions that succeed will be those willing to rethink how they use what they already have. 

Our experts

Mike Neale, Director of Systems and Automation, has more than 30 years of experience in organizational transformation and acceleration, specializing in financial technology and operations.

Leslie Unrue, PRI Data Engineer, is a seasoned banking professional with a data-driven approach who has successfully led teams across various banking channels, including deposit operations, ACH, wire transfer, ATM, debit card and treasury management service support.

Resources

Maximizing System Utilization Series

• Maximizing System Utilization: Implementing Technology Solutions – PRI
• Maximizing System Utilization: Harnessing the Potential of Reporting Systems  – PRI
• Maximizing System Utilization: Understanding Parameters and Capabilities  – PRI
• Maximizing System Utilization: Ditch Paper and Manual Processes  – PRI
• Transforming Banking Through Data and Analytics – American Bankers Association

PRI specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.