The Future of Core Banking and Me

Paul Cazaz, GM Core Banking, ME Bank

Paul Cazaz, GM Core Banking, ME Bank

The last decade in banking has seen the digital revolution, and this next decade promises to transform banking to a more personalized experience. The shift we have seen from product-focused to customer-focused banking will only accelerate, and if banks do not consciously put customer needs at the heart of what they do, they will not be able to differentiate themselves.

We have also seen financial institutions starting to take positions on socio-economic issues and become representatives of community sentiment– an arena which was previously reserved for politicians with good intent, stances on climate change is more strongly enforced with the recent Australian bushfire Armageddon.

It is simply not enough to offer a savings account and a home loan anymore without also appealing to customers in a way that addresses their needs, solve their problems, and appeals to their everyday life.

For banks to make this transformation, core banking systems are crucial.

A sound core banking system is scalable, contemporary, flexible, performant, and always on. It provides banking that is secure, reliable, and always available. However, a great core banking system enables personalization that offers meaningful information to customers that is relevant and insightful. At ME, we are also looking at how we tap into this rich data source to provide customers with a better experience. We have a focus on core banking and data with the intent of providing more customer-focused outcomes.

Untapping the power of personalization will be a key feature this decade. Data will be the enabler of that key.

An example of how personalization will come to fruition is open banking. Launching in the coming months, open banking is based on the notion of consumer-centric banking. With a customer’s permission, their data will be shared among institutions to break down the current barriers–time and cost–of changing from one provider to the other and making the transfer easier.

It could also seriously change how you handle your personal finances if the data held in all systems of the bank and the environment is harnessed in a customer-centric way. Imagine having a single view of all your finances, including superannuation, investments, savings, credit, and loans–no matter what institution, but more than that being able to seamlessly switch institutions to take advantage of offers that best suit the customer. Today the biggest inhibitor of that is the inconvenience of contemplating (let alone doing) such an activity. This is just one example of how the power of a bank system set can be harnessed to provide value to customers so they can better manage their money and the kind of service that banks need to offer customers for them to stand out from the pack and help all Australian’s get ahead–which is ME’s guiding purpose.

We are currently in the final process of migration of our legacy home loan systems and are refreshing both the core banking system and core treasury system, which will better manage risk and enable many new features to be quickly developed.

At ME, we are starting the decade in a relatively good position. ME’s Core Banking system is a contemporary relative to the industry, since partnering with Temenos in 2013 to streamline customer account administration, all accounts are mastered in one system achieving a centralized view of our customers. Our warehouse has been uplifted and now contains all product sets across the bank, enabling deep customer insight.

Banking will only become more personalized this decade, and ME’s purpose will help ensure that we are always thinking of all Australians getting ahead.

With a contemporary core and data system, we will look to build out a best in class data science capability to provide meaningful insights from cross-referenced data. This capability will drive future decisions that ME makes as an organization. ME is poised to take a red-hot crack at personalizing the banking experience for our customers, so they genuinely benefit from their banking experience.