briefing
UK Cloud
By S . Sambamurthy , Head , UK & Europe , TCS Financial Solutions
Pathway to modernization for UK credit unions and banks
A rough estimate in the industry is that about half of all core banking transformations fail .
For these transformation initiatives , the stakes are enormous . Just this year , a large UK bank suffered a major failure during the migration of customer accounts . This high-profile , customerfacing failure caused the bank major losses of £ 100s of millions , a precipitous stock price drop , untold reputational damage , and leadership turnover .
Smaller banks and credit unions in the UK have also encountered difficulties with their core transformation initiatives . Although for a small credit union the absolute scale of losses may be minimal compared to that of a large bank , it ’ s a major upheaval for any organization to cope with a failed or abandoned transformation project .
Given the obvious risks , it ’ s noteworthy that so many financial institutions still find it necessary to undertake transformation initiatives .
For UK credit unions and smaller banks , the pressure to transform comes from three main sources :
1 Competition from new entrants : Like other banks around the world , UK credit unions and smaller banks are trying to figure out how to attract and retain the next generation of savers , homebuyers , and investors . To do so , they will have to compete with a world of fintech startups and innovators . This effort will require new digital capabilities , supported by scalable business models that can compete with powerful competitors .
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