Celent recognizes Länsförsäkringar Bank as the winner of the 2020 Celent Model Bank Award for Core Technology Replatforming for its initiative Core Banking System Replacement. Banking industry technologists often describe the difficulty of ripping out and replacing a core banking system (CBS) as analogous to “replacing an airplane engine in flight while flying at 30,000 feet”. This Model Bank winner accomplished the banking equivalent of this feat while continuing to serve all passengers, meeting new Nordic and European Union (EU) payments requirements, and positioning the company to take advantage of open banking.
This is the first modern CBS installation in Sweden that included all banking, lending, and payments systems. The bank selected the TCS BaNCS Global Banking Platform, an architecturally modern, componentized banking solution that has a strong payments infrastructure and supports open banking. The implications for other mid-sized financial institutions between USD $20 - $50 billion in total assets is that ripping out and replacing a CBS (“rip & replace”) remains a technology strategy for them. Rip and replace is not just an option for community banks and credit unions. Mid-sized banks can successfully navigate rip and replace core banking system replacement project. Core system replacement, however, is a multiyear project, requires ownership and management to take a long-term investment view, and requires experienced IT partners and trained internal staff to be successful.
