A Wall Street Journal article today examined the challenges that many community banks face when working with their core processors to implement new technologies and remain competitive with larger institutions and highlighted the American Bankers Association’s efforts to help banks innovate more quickly. While the majority of community banks largely depend on the nation’s largest core providers to provide the infrastructure they need to operate, the article noted that legacy contracts and lengthy implementation of new technologies have become particular pain points.
“I’ve met with over 3,000 bank CEOs, and this came up time and again: the challenges and constraints they face with their core provider,” said ABA President and CEO Rob Nichols, who was quoted in the article. To that end, ABA recently announced a direct investment in Finxact, an emerging technology company that offers an innovative, open core banking platform for banks.
The investment is part of ABA’s ongoing effort to ensure that its member banks are prepared to make the transition to banking’s digital future. The association also continues to work constructively with the nation’s leading core providers to encourage innovation.