Welcome to Tuum Talks Episode #11 – Navigating the Currents of Change: Global Insights on Banking Transformation
Recorded Live: Thursday, February 6th, 2025
Host: Myles Bertrand, CEO, Tuum
Panelist: Christopher Ortiz, Group Chief Executive at GFT
Tune in for a revealing episode of Tuum Talks as we explore the ever-evolving landscape of core banking modernization with Christopher Ortiz, Group Chief Executive at GFT, a seasoned expert in digital transformation across the global financial services industry. This session delves into the unique challenges and strategies of core banking transformation as experienced by CIOs across Europe, APAC, and America.
Learn why numerous organizations are still grappling to achieve their goals in digital transformation and how leading financial institutions are tackling these challenges to stay competitive. Chris offers his distinct perspectives on core banking modernization, highlighting the significant impact of artificial intelligence, Banking as a Service (BaaS), and embedded finance on the strategic considerations essential for successful digital transitions.
Why Watch?
- Gain a comprehensive understanding of the global differences in banking technology adoption and strategies, including the rise of BaaS and embedded finance models.
- Learn about the common hurdles in digital transformation and effective strategies to overcome them.
- Discover how to effectively communicate the value of tech investments to stakeholders.
This Tuum Talks is essential for banking professionals, fintech innovators, and anyone interested in how the landscape of financial services is being reshaped by technology. Don’t miss the opportunity to equip yourself with the knowledge to lead in the digital age!
Stay Tuned for More
To keep abreast of the latest in banking innovation and future episodes of Tuum Talks, sign up for our newsletter at the bottom of this page. Join us as we continue to bring leading voices and perspectives to the forefront of the fintech dialogue.
Watch, read or listen to the conversation below:
Navigating the Currents of Change: Global Insights on Banking Transformation
[Full Transcript]
Myles: Hi, everybody. Miles Bertrand, CEO of Tuum. Welcome to Tuum’s Talks, it’s always a pleasure. Today I’m joined by Chris Ortiz, who is a senior executive and board member at GFT. Chris, thanks for joining us today.
Chris: Thanks, Miles. I appreciate the introduction, and good to see you. It’s been a while. We’ve been on this banking transformation journey for a while, so it’s good to see you again.
Myles: That’s great. Maybe just for the audience, give a little bit of background on your own personal journey and how you have now a new senior position within the organization. Just really touch on GFT’s journey, because I think it’s quite amazing what you guys have been able to achieve over particularly the time we’ve known each other, the past five years or so, and how you’re now really recognized as one of the key partners when it comes to banking transformation. That’d be great to hear a little bit of that journey.
Chris: I appreciate it. Thanks for letting me give a little bit of intro. I was thinking back, when’s the first time we actually interacted? It’s probably I thought it was five years as well, I think it’s seven, eight years, which is a bit scary at the same time.
Myles: Hey, I still look exactly the same. That’s the most important thing.
Chris: Absolutely. I’m a little bit more grey, and the people make it known. Seriously, I think myself personally, thanks for the intro, I’m a board member of GFT. My responsibilities cover, which is quite relevant to this, Asia-Pac, U.K., U.S., and Canada. But I let’s say specialize on global accounts and what we call internally GFT core banking reimagined. What do I mean by that? Core banking transformation has been a significant part of our journey to date, over the last pretty much seven years or so.
While we’ve been a GFT, maybe just a quick intro about GFT, GFT is a 35+ year German organization, engineering in its heart. We have a new CEO as of first of January, as the previous CEO retired. My colleague, Marco Santos stepped into the helm of CEO. We’re launching and our strategy. We’ve always been doing digital transformation, but now it’s more around responsible AI centric and digital services. It’s great, and goes in line with everything we’ve been building up to today.
My personal journey started in JP Morgan and Deutsche Bank. I was an executive there and I had banking in my blood. GFT’s DNA is made up of 75% pretty much of banking, another 20+% in insurance.
But specific around core banking, I point back to where we started about, like I said, seven, eight years ago, where we focus on what I call waves. The four waves that GFT have worked on, and if you bear with me for a minute I’ll talk about how we got to this point, the first wave was working with hyperscalers like AWS and Google, and we got ahead of the curve. That was probably back in 2018, maybe a little earlier. We realized there was a need, there was a shift in the market, and we had to get on that. The cloud journey was quite important to our clients, which are tier one banks and tier two banks. Understanding the underlining, how to build landing zones, how to get clients migrated to the cloud, et cetera, was a key part to us. That was what I call wave one, effectively, back to 2018.
Wave two, which is around platform modernization was probably earlier than 2020, but in my memory that’s when we started seeing that. That’s when something called COVID started, of course, and the digital transformation seemed to be the hot topic on the agenda. But we were already on that journey specifically. If we look at, like I mentioned, insurance, we were already doing things around the Guidewire platform. But with banking and financial services, we were already looking at fourth generation cores or modern cores for banking transformation. There again, it joins up really well with the first wave, which is cloud transformation, hyperscalers, and doing new core banks on those clouds. That was really great. Since then, we’ve delivered, and I’m very proud of this, that GFT as an organization has been able to help clients deliver 15 different – we counted the other day and it’s literally 15 transformation projects over the last seven years. It’s really exciting to do that.
Now, I mentioned there’s four waves. The current wave is around AI, like most people are looking at it.
Myles: I think it’s actually a tidal wave as opposed to a wave.
Chris: I would say our four waves become a tsunami, in a positive sense, in the technology. But you’re absolutely right. GFT has always been doing data projects, it’s always been the core of what we’ve been doing with engineering. But back in 23, maybe earlier, we were already looking at AI, doing things around visual inspection, again, focused on the hyperscalers and how their technologies work, then how it applies to core banking transformation. Last year we launched what we called the AI data marketplace, AIDA, in 2024. We’re just building on that and how it integrates more with our clients with core banking.
Then the final wave, which is not yet, I would say it is, but it isn’t, is around digital finance and digital wealth. Which again you accumulate that, it all comes into it. That’s blockchain based tokenization. We see a lot of that happening in Asia. It’s probably less so developing, or it’s developing more going West. But that’s quite exciting.
[00:06:00]
This is really where our focus is, bringing those four waves together. They didn’t finish. The first wave doesn’t finish. Actually, digital transformation doesn’t finish, it continues. We’re on those four journeys.
Myles: I think that’s where we’ve certainly found the synergies between what you guys do and support that. You talk about modern cores, we underpin and support a lot of those waves. We ourselves look about AI at the moment. We’re an enabler for upstream AI capability, etc., as well, so it’s good to hear.
One of the things you touched on there was really core banking modernization, which is a topic that’s been run around for a few years. I have had multiple discussions with CIOs globally, but it’d be good to get your insights because you’re constantly in these discussions. What are the key priorities shaping their strategies for core modernization? I think it’s really interesting how it seems to start, and more and more it’s becoming a top priority for them.
Chris: Sure. CIOs, those are probably my favourite conversations, talking to them in the banks. Each one is different. Let’s be clear. They’re all special. I remember one CIO many years ago said 80% of what we do is commodity, but 20% is that special sauce. That still resonates, and that’s what makes the differentiation. But there are some common themes that we talk about with the CIOs. Then obviously it also depends how it resonates.
Regardless, and I’ll go through some thoughts around how that is. I think in the end, what really is the key piece and brings these things to life for them is the examples we do, working with people like yourself, Tuum, how do they actually fit into their journey. Each journey is slightly different. There’s some commonalities of course, but it’s those real life examples and what GFT has actually gone through again, as I mentioned, 15 implementations, you learn something and you get better at it over time. It’s quite key. Working with you, and understanding your team and understanding those key drivers as well, those are good stories that they want to hear.
There’s no surprise the CIOs are looking at, how do I make the business more agile? That’s in two ways, front to back. It’s not just an IT decision, it is a business decision. Front to back, they all need to be agile. They all need to understand the ability to scale up, and the better chance to faster deployments, faster products to market, how to build a futuristic or a manageable system in the future, we call it composable architectures and stuff like that. I think that’s quite key, the agility of it.
For sure, customer centricity. You’re doing this to attract customers or to enhance their experience. Innovation, they’re always looking for that. Catering to the needs of the clients, catering to what they want to really achieve, whether it’s a mobile first, which is most people’s objective, et cetera. I think that’s a second thing, customer centricity.
[00:09:00]
Two or three other things, so I won’t bore people. I think as always, people want to say how they reduce risks and reduce costs as well at the same time. Some of the risk parts are regulation, things like that. That’s a massive topic. It also keeps us in business. The more regulation, the more business we have to integrate things and build things. But seriously, I think that’s a key piece, how do we prevent the CIO personally having exposure to risk there? But also on the cost side, how do we optimize cost? Looking at legacy systems if you’re an incumbent bank, how do you reduce those costs? How do you modernize that without putting the bank at risk, or the financial institution at risk? Which also leads to fraud, security, all these topics, that’s a standard now, especially with AI in place and getting predictive analytics.
I think the key thing ultimately is getting to two points, which is business opportunity. How do they grow their businesses and how do they adapt to their new clients or the markets they’re going after? Two, the culture. This is the one that I love the most. Culture and the mindset of doing this, that is key to making this change because it is a change, and many of them completely underestimate that. That’s where the conversation is quite key.
I think you live through that. I think you’re part of the conversation.
Myles: I do. I think I say it on every single one of the Tuum Talks. I go, “The biggest barrier for a lot of these CIOs is that culture piece.” They’ve got to think differently, they can’t continue to repeat the sins of the past. But I like what you’re saying as well, because our narrative is very much we’re an enabler. We want to support their ability to do that customer centricity, the ability for them to do deliver products quickly and efficiently and fast. That’s very much the fundamental DNA of our business. That’s exactly the same things that we’re seeing in the marketplace and what we’re hearing.
Yeah, I like that you said that without any prompting, it’s the cultural bit and the fact that they’ve got to think differently. I still think they don’t pay enough attention to that. They have this big plan, and when the rubber hits the road they get caught up on these challenges around culture, both internally and externally as well. Great that you said that.
Chris: I think the internal part is probably more challenging than the external part sometimes. To your point, they can’t get their head around it. I think it’s the one last piece of information. Sometimes the scary part when you talk to the CIOs is, it’s like a surprise. Like, we really haven’t thought this through yet.
Myles: We know humans don’t like change. It’s against our natural DNA.
But one thing that we are seeing quite a lot is this cross regional transformation which is happening, particularly from a core perspective. You guys have such a global footprint, you’ve already said to me that you’re in London now, you were in Spain the other day, and you’re on your way to Asia in the next few days. You basically have a global footprint. What challenges are you seeing, and how’s that being tackled? How are people thinking about core banking transformations across the multiple regions?
Do you see significant regional differences? I know from my perspective, I do. I think it’s very different in Asia as to what it is in Europe and Middle East as an example. It’d be really good to get your insights and your thoughts on this as well.
Chris: Yeah, you’re right. Everyone asks me where I live, and I say I live in an airplane, right or wrong. But again, that’s the beauty of the role and the learning for me. Yourself, myself, talking to different clients in different regions, they learn from each other, or at least the smart ones actually listen, hopefully, and they take something from that.
I think there’s some common themes across globally, and then I go a little bit maybe more specific around regions. Globally, ultimately, again, going back to agility, they all want to understand how to be more agile, how they can scale up, how they can go faster, how they can be a more global organization, depending on what their objectives are. I think that’s one of the themes that we see there and the challenges. That’s not a challenge. It’s just about the general challenge across the board. Again, customer experience is important, and the mindset aspect of it.
But the key is in those specific regions, in Asia for example, a lot of what we see there, for sure language is one of the challenges there, and character sets. It sounds like a little detail, but it’s quite an important one, and adaptation to those markets. Why do I say that? Because sometimes people think in the West, Asia’s one big country. It’s not one big country. It’s got quite a few countries, and they’re all different cultures, which is okay, which is exactly that.
[00:14:00]
My point there is it’s not one-size-fits-all. I think that’s one of the challenges. People go into the markets thinking it’s one-size-fits-all, and it’s not that way. You have to adapt, you have to be a bit more local, etc. But then you also have things like cloud environments in Asia. Some of them are more restrictive than others. So those are some of the challenges you find there in that space.
When you move a little bit more West, let’s say to Europe, what you see is similar things, stuff like that, probably less so. But then you have different payment systems, payment schemes. Again, you have that in Asia as well, but you have those challenges there. Data privacy, like GDPR and stuff in Europe, adaptation to that is a big challenge as well and something that people have to consider. Tax regimes as well, don’t underestimate the tax aspects just to get some things launched, forget about the actual implementation and the products.
If I go even further West to the Americas, a lot of times exciting and environments come as exciting as Asia right now. Again, different cultures, but it’s a little bit more homogeneous than we probably think. I’m not as an expert on LATAM. But North America, what I find is the challenge there is they’re just slow. They’re comfortable where they are. There’s a resistance. The resistance to change is definitely there. Funny enough, in the last six to nine months, maybe twelve months, we’re starting to see that that coming. I would have expected me being originally from the States a little bit more faster transition, but they haven’t. We’re seeing that step by step. Of course, there’s a lot of regulation there as well.
That’s by regions. If you don’t mind me, just a couple more thoughts. It also depends on what banks you’re dealing with, or in financial institutions. If you’re a tier one bank, you’re going to be thinking about other things. You think about how I in-source and keep the talents and skills, because I don’t have them or I need to acquire them. I can’t just go for a big bang replacement of a core or a core banking modernization. I need to think about how I’m going to do this in a phased approach. That’s where we help the clients to think about what the solution is. They have to take the decision, but we help them. They tend to take longer decisions, more cautious. Whereas the tier two and three organizations, they’re a bit more agile, a bit more dynamic with what they want to do. They’re a little faster with decisions, not all the time.
But there is a cost challenge and that’s where solutions with Tuum and other organizations can help them with that. That’s something they need to anticipate.
Myles: I think that’s something we’re seeing as well. I think the days of the big core transformation are dead. They really are, because of the challenges associated with cost, time, et cetera. We’re seeing a lot of specific use case driven initiatives, or do something new or solve a problem and narrowing it down to a specific use case, is really starting to be the lead driver with what we’re seeing as well.
Chris: Absolutely.
Myles: [00:17:00] Love the statistics. They’re scary statistic as well. Gartner came out recently, or not so much recently, but they said 81% of boards have not made progress, or haven’t gotten even close to achieving their goals for digital transformation. Which is pretty scary because everyone’s been talking about digital transformation in the financial services sector for 10, 12, 15 years. 81% is a big number.
What do you think are the biggest obstacles why this is occurring? We’ve already talked about culture. I think culture has got a lot to do with that. But what else do you think are some of the big obstacles that you’re seeing? Then I can give my two cents worth as well.
Chris: Yeah, I appreciate it. I don’t have the crystal ball, but to be honest, if they said 81% already had finished the transformation journey, then I’d be even more worried. I think people would go out of, business because I do think the journey tend to be longer than people think. That’s probably one of the obstacles, they don’t understand that it is a journey, it’s not just a project, get it done and move on.
You also have to take into account, there’s a lot of things, right or wrong, unfortunately. You have wars going on, you have governmental changes. I think there was like six new elections anticipated across my region. That will either accelerate or slow it down. Some people don’t take that into account when we’re starting to do a business plan, because it does have an influence. We’ve said it before, adaptation to change is a key piece here.
But to look at it a little bit other than the mindset and the culture, you think about the challenges from incumbents or a bank like a big tier one bank versus a greenfield bank or neobank, the challenges are similar, but they do have different obstacles to that transformation. Incumbent banks have legacy systems – mainframes, they want to reduce costs. They actually have a big challenge, which is a lot of the talent who maintain that are going to retire at some point. They’re not going to be able to deal with defining; so they have to rethink their processes, they have to rethink the services they want to offer. They have to decouple. These systems get built up all the time. If you have acquisitions, you add on top and on top. We have to decouple those things and think about what’s the easiest architecture for the future, and how to integrate it.
I think that’s one of the challenges for legacies, is actually rethink. Take a blank sheet of paper or whiteboard and say, If I was to build this today with the great technologies we’re seeing coming out, how do we do that? Build a business roadmap, have the buy in with the new solutions, what are you trying to achieve?
I think that’s what incumbents have as obstacles and challenges, and they just need to be on top of those. I can tell you how GFT helps in a second. But on the neo side, or the greenfield banks, they have slightly different challenges. I’m going to acquire clients, I’m going to keep the trust of the clients, because I’m a start-up. Will it be around? How do I become profitable in ideally a three to five year horizon? Otherwise I might be out of business. Then again, safety of the money to the clients, making sure they feel comfortable. But they still have to introduce new innovations and new features to keep the clients engaged.
Overall how do you address that? Or at least how does GFT address these things? We try to talk about the cost upfront. People come in, “I’ve got a budget and this is what I have to spend.” But what are you trying to achieve? What are you trying to actually achieve first? And let’s try to take the elephant, slice it up in pieces, and consume it step by step. Not just do something just to prove what you really want to do, because the first thought is usually not the final answer.
Manage the resistance to the change. We talked about that, I don’t want to go over that again. Plan for that complexity of transferring. If you’re a legacy system, you’ve got to migrate things. That’s complex. You’ve got a lot of history there and you want to make sure you don’t lose it, so you focus on that. Then I would say be realistic about time frames. That’s where we help out, with helping them take decisions. Most of the time, our biggest challenge we find is their own obstacle internally. They haven’t prepared properly to present it to a board to get approval. What happens there? Something that used to take 9, 12 months to take a decision is now almost double that at this point in time. By that time I could have built the bank. I could have built it for you. You know this very well. We could have built it in that time that we’re taking a decision, and you would have saved money, ironically. I think it’s preparing them from the day one how to actually get this through the organization.
Those are some of the organization challenges. Of course, you need to do return on investment, et cetera, but those are some of the things we see.
Myles: I think that’s exactly right. The number of times, and I think we’d notice that particularly just the decision process seems to be taking longer and longer because people are risk adverse. What’s going on, you’ve got challenges going on in the market as you saw, geopolitical issues, which are just driving different behaviours.
This feeds into the next question or next theme there, the regulatory complexity as well. Quite often we hear banks just spending 75-80% of their budgets on basically keeping the lights on, fundamentally keeping the regulator happy. That’s a lot to do with their legacy practices and their processes and how they do things. What we’ve seen as well was that there’s a lot of stories in the press, a lot of the greenfield banks get stung by regulators because they haven’t got their AML up to scratch, or they’re not doing the right KYC, or they way they look at data, and things like that.
Regulatory compliance is one of the biggest things that has a massive impact on core banking strategies from that perspective. It’s a crucial role in shaping. How do you feel, your perspective, and then also how do you help bridge the gap for the customer and the regulator and also take them on the journey so that they can be comfortable to go and sit there in front of the regulator fundamentally and say, “Hey, we’re going to modernize. We’re going to adopt things like AI. You need to get comfortable with that, Mr. Regulator, and this is the process we’re going through.” How do you guys help with that?
Chris: Some parts we do and some parts we don’t do in that phase.
First of all, regulatory is a great thing for people in my business, to be fair, because it always keeps us on our toes. You always have to be ahead and anticipate the regulation, and what does that really mean and understanding of it. But ultimately, regulation is in some ways the catalyst for the modernization in some cases. You need to do that transformation because of the regulation.
Again, I highlighted GDPR before, the U.S. has to adapt to that if they want to comply with European laws. PSD2, it’s been around a long time, at least in my mind, it feels like forever, in adopting API-driven strategy and be more flexible. All those aspects play into it. You mentioned a little bit of money laundering and fraud, things like that. That complexity means that we have to look at it, we have to make sure we help them with how to assess it, and more importantly, document the decisions that are taken.
That’s what we always try to work with the clients, is when you’re taking decisions, document those decisions. What are you trying to do, and have an audit trail for that. Because that’s important in the regulation space to demonstrate why you took certain decisions. Maybe you took the wrong decision. Hopefully not. But the thing is you’ve documented, you understand it. What was the decision behind it? What was the decision mission log behind it, what we would call also biases? What was the reason why we took that decision to help those clients? Model those scenarios, see the scenarios and have it all documented. I think that’s where GFT helps. With AI now and data analytics, that also helps them to document what’s the efficiencies they’re going to achieve, what are the insights? It’s being prepared for the regulator when and if those questions come.
But I fundamentally believe it’s regulation that drives the modernization. Not all the time, but in this case, in some scenarios it does come in. that also helps the bank, let’s be clear. It can unlock new opportunities for the banks because it will show there’ll be more efficient to the regulator. They show innovation, and they are also building the customer trust, which means they are on a solid ground for future implementations and stuff. Anyway, they should leverage the tech. Using core banking solutions will help them also anticipate the regulator.
Myles: Yeah, which is good. Okay, great. I think also one of the biggest challenges that we see as well is you’ve got to justify the investments. As you talked about CIEs, like, how do you do that? In the times of financial constraint, how can CIOs build compelling cases for substantial investments in core banking?
We quite often see, yes, they want to adopt core banking, but one of the elephants in the room is migration. Quite often core banking investments get killed because they’ll say, it’s 10 million for the tech, but then there’s this line item of $20 million for migration. They’ll go, why is it so much? We don’t know what migration is going to be like. A lot of these projects get killed from that, that’s a good example we have.
What are the types of long term benefits of modernizing core systems in terms of operational efficiency, customer satisfaction? You’ve seen with 15 runs on the board, which is a good outcome, from a cricket analogy I know you want to score a century, you want to get to 100 of these things. What’s the key benefit to modernization, and how does it help the CIO’s business case?
Chris: I appreciate it. The benefits, first of all, the CIO and we talked a little bit, is preparation and anticipation and getting this over the board. I think the business case has to be clear.
By the way, it has to not just be a CIO agenda, it has to be a business agenda and integrating with that. We see we’re talking more to the business every day more and more, and supporting the CIO in talking to the business, because they need to make sure its of strategic importance to the decision makers, to the stakeholders, make sure they’re feeling comfortable with that, and understanding the challenges that will come. I think part of that, I mentioned it before, shortage of talent, if it’s legacy systems. That will cause higher costs over time, because the more people retire, the fewer people to provide support for that, not to mention the consumption is probably higher.
Myles: I heard the other day, they’re going to restart Cobalt programming and education. You can go learn Cobalt again, because it’s going to take so long for people to get off of Cobalt. All the developers and all the engineers are retiring or dying.
Chris: In the retirement age or you train Cobalt developers. To be fair, we did do that in Brazil many years ago. We were training people in Cobalt, which is crazy to be doing that. It could be a niche for some people, so absolutely.
But these are the kinds of things that people need to understand, that are the challenges. The long term benefits is not to be dependent on those skillsets. Look to reduce the cost. Faster ways of service to the clients. We talked about customer experience and faster product development. I think that’s part of the pitch that goes into the business.
You can deliver better solutions for your clients, things they haven’t even thought about, tailor-made type of solutions. That’s where the analytics, the AI also comes in, and we should be using more of that over time. I think we will see it, it’s just naturally going to happen.
It’s also key to show the seamless journeys. People putt off the gas over the last year or so, maybe 18 months. I think it’s starting to come back and we’re starting to see people realizing, wow, we need to get back on it because there are a lot of benefits of this. The end game is customer satisfaction, client acquisition and retention. Let’s not underestimate the retention.
Myles: Exactly. Can’t forget about retention. Everyone talks about growth, but you’ve got to keep customers happy as well.
Chris: Absolutely. Those are some of the thoughts. Again, always operational efficiency, be as lean as you can be.
Myles: Yeah, that’s really good. It’s good to hear. Like I said, same thing. Quite often that’s the hardest thing. In a lot of scenarios, we’ve seen a lot of investment by banks on their periphery. They’ve all got great UIs these days, they’ve got pretty good customer experience, but they’ve left this black box alone because if it ain’t broke, don’t touch it.
I’ve said it before, I think there’s a real, to use your term, a wave in the market right now where customer expectations on how you service me, how you support me, how quickly you get products out the door, how do you show innovation to me as a customer? AI, again, a really good example. They’ve got to start tackling this. You can’t have a core that goes to sleep for five hours a day. You’ve actually got to have this always on real-time capability. You’re starting to the actual narrative that, a lot of people don’t want to tackle the question, but we’re seeing it as well that people are saying, “Hey, I got to start doing something. I need to move the fourth or fifth generation core to tackle the upstream challenges that I’m now getting from both existing customers and new.”
Chris: I agree with you. I’m going to say something, I don’t know if I should say this or not, but I will say it anyway.
Myles: Depends what it is, but it’s exciting.
Chris: I think what happens is some people, CIOs, don’t want to make the change because they also saying, why have that headache? Why when I’m running the business do I need that headache?
Myles: It’s the next guy’s problem, or the next girl’s problem.
Chris: Exactly. That’s probably one of the obstacles that unfortunately does happen in these organizations. They just think, why complicate my life in this point in time, which obviously is not a good solution. Actually, they have to do is take it from a different angle and say, this is a chance to motivate my team.
The best part of going live with any of these implementations personally is the excitement everyone has. They work to death, don’t get me wrong, to get to that. But the excitement of going live and producing these solutions, that’s gold dust, regardless of what it is.
Myles: It’s true. One of our customers, they went through quite a big old school type organization, takes a long time. They wanted to do something new and it was a long journey, and they got there. But just the pure excitement, we actually had an offsite with them and we had a little bit of a mini celebration. Just the genuine feeling of satisfaction, and now they feel they have this launch pad where they can do a bunch of new things. They got the first one over the line, solved a problem, helped me do something new, and now they feel like the handcuffs have come off to a certain degree in regards to that. It’s great to see.
We’ve got a little bit more time and I’ve got a few questions. First one, I’ll do this live, and this is an interesting question. Will we go deeper into Tuum solution specifics today? Andre, no, we won’t, because it’s not a Tuum product session. But I’m happy to connect you with my sales team and they can talk you all through what’s going on. Good sales opportunity for the Tuum business out of this today, so I appreciate that.
More relevant for you, anonymous question. Banks often struggle to balance innovation with the need for rock solid core stability, which we know you don’t want to end up on the front page of the newspaper. What strategies have you seen that successfully enable financial institutions to integrate AI as an example, without disrupting their core banking operations?
[00:34:00]
Chris: I think what we’ve seen most is usually about not isolating it, but sometimes clients will, if you just take a new core implementation they’ll do it in parallel. Sometimes we call it a bank within the bank. You have multiple versions and every client’s slightly different.
The latest one I’ve seen is that they’re doing things in parallel. They keep the legacy system, they put the new core in place, they’re syncing them up. You could argue it’s a lot of cost there, but they want to make sure it’s stable over X amount of period. I’ve heard someone saying they’re going to do two years. I’ve heard people say they do six months. But to make sure the stability and building the innovation into the new ones, that works.
Sometimes other banks just do the new products and the new piece. They implement the new system and they have the innovative new products here, and they slowly either decommission the old products on that or they move it into the new system. There are different ways of doing it.
The same thing with AI. Where do you apply AI? You apply it probably on the new products. You don’t screw up your existing business, again going back to customer retention. You don’t want to upset them. You want to make sure if it’s a new product, that’s where you can look at it. You don’t disrupt the current business. Again, they do a lot of these things in parallel. Hopefully that’s answered the question.
Myles: Yeah. We see that a lot as well. When we have conversations, we recommend you coexist. The concept of big bang approaches these days, I think it’s just not the way to do it. You’re right, there’s a bit of additional expense. I think banks or potential clients need to understand that, you might have an uptick in overall cost because you’re running two things in parallel for a period of time, but the long term benefits that you talk about when you decommission that old legacy and the cost efficiencies that you get with modern architecture, cloud, etc., the business case becomes really solid.
We always recommend coexistence. It’s always quite funny when we hear, “We want to go live on such and such a date, we’re going to do much,” and you sit there and go, “Mm.” Lessons learned from the past from that perspective. Good to hear that.
Last before we finish up. How critical are ecosystem integrations and third party collaborations in accelerating modernization, in your opinion?
Chris: I like the word ecosystem. The core is the core bank, the core product. Tuum is obviously very key, that’s how you’re going to generate your new products and all that. But everything else, the front to back, that’s where the CIOs get it wrong or they forget in the business case. That’s important too.
If anything else, you can trust Tuum. You can trust with those core banks. They know what they’re doing, and you should discuss how you’re going to build it out and all that. But everything around it, that’s where the complexity is, that’s where the hidden costs are, depending on your organization. You need to think about that upfront, not down the line.
Again, the migration aspect, it doesn’t just stop when you go live. There’s a lot of work down the line as well, whether it’s adding new features or whatever, new products. But that ecosystem. front to back. To be frank, that’s how GFT got involved with these integrations in our first project. We were building infrastructure, we were building the front end, and by the way, there’s this little thing called core in the middle, which was very important, the brain of the whole thing. That integration is the most critical part. Don’t underestimate that. It’s something that must be part of that business case.
Myles: That’s something when we’ve worked collaboratively on a bunch of these things around the globe, I think it’s exactly that. That’s the value of, we talk about ecosystem and the partnership that we have as two organizations, but we both know that there’s these other periphery organizations that we work with or capability they bring in.
I always use the analogy with the engine, the customers building the car. But why we work with organizations like you guys is you do the plumbing, you basically engineer and put the car together for the client, which I think is super important.
Chris, always an absolute pleasure to have our interactions. Thank you very much for joining us on Tuum Talks today. Hope the audience had a good time, and always look forward to the next Tuum Talks. Thanks a lot. See you later on.
Chris: Thanks for having me. Appreciate it. All the best.
Myles: Thanks, Chris. See you later. Bye.
Get in touch to find out more.