Increasing number of banks upgrading core IT systems to improve customer analysis
2010-07-12
A recent survey by the Aite Group found that a growing number of financial institutions trying to determine how to prevent customer attrition have reached a point where they need to upgrade their core systems in order to keep customers - despite the high up-front cost.

According to the report, 20 percent of financial institutions in the U.S say that the need to upgrade is a high priority, while another 56 percent could also justify the costs of replacing or transforming their core systems.

"The number of core system replacements at financial institutions will slowly begin to increase due to necessity as well as pent-up demand and the desire from healthy banks and credit unions to take advantage of new market opportunities," said Christine Barry, research director with Aite Group.

Industry analysts told US Banker Magazine that newer systems allow financial institutions to improve their customer analysis in a variety of new ways, such as predicting loan defaults or customer attrition and deriving effective cross-selling models.

A growing number of mid-sized institutions are also replacing their own systems, fueling a rise in the upgrade market. According to the the publication, Aite researchers found that while there were 391 core replacements in 2009, that number is projected to grow to 575 by 2012.

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