Transforming Technology: Strategies for Successful Core Conversions

Virginia Heyburn is back with another episode of Fintech Unleashed. On this episode, she is joined by Anne Miela, Engage fi’s Vice President of Implementations to explore core modernization as an efficiency strategy. They discuss what makes core conversions unique in today’s landscape, how financial institutions can leverage them to drive efficiency, and the key steps to ensuring a core conversion delivers the desired results.

Transcript

Virginia Heyburn (00:02.446)
Hello everyone and welcome back to another episode of FinTech Unleashed. My name is Virginia Habern. I'm the Director of Research, Insights and Advocacy at EngageFI. And today I'm really excited for you to meet my colleague, Annie Miele. She's the Vice President of Implementations at EngageFI. And what this means is that she is a core conversions expert. She knows it, she's done it, she's lived and breathed all things core conversions.

And that's exactly why I want you to meet Annie. Core conversions, as you know, are a complex undertaking for any financial institution, no matter the size, and making absolutely certain that they are a success is critically important to financial institutions, especially now when financial institutions are looking for scale through innovation. They're also looking for scale through &A. And on this episode, we're gonna dig into what makes

core conversions unique in today's landscape, how financial institutions can leverage core conversions to get more efficient and also the key steps to ensuring that a core conversion delivers big results. So that's a lot to cover. Let's get started.

Virginia Heyburn (01:20.182)
Annie, it's so good to have you here at EngageFI. Please tell us about your background and your experience with core modernization.

Anne Miela- EFI (01:28.613)
Thanks for having me, Virginia. I love being here from an experience perspective. Right, wrong, or indifferent. I've been doing conversions now for 25 years. It's a DNA kind of thing. It's in your blood and I absolutely love it. know, prior to that, I was a developer. So I got to see how the sausage was made, so to speak. So I think it really helped me as I started implementing the software that I actually built a while back.

gave me some really good insight. So, been in the financial services industry now for almost my whole career. I started off as an accountant in a credit union way back when, and then worked my way out of accounting to financial systems. Accounting is pretty much the same thing every day. Here, it's not, you know, when you're doing conversions and you're doing system integrations and quite frankly, helping our customers transform their system, it's a little bit different every single

Virginia Heyburn (02:26.606)
transform their system, transform their business and things have changed a little bit over the last few decades that you've been in this business. What is what's unique about core conversions today? So what's what have you seen change?

Anne Miela- EFI (02:41.541)
You know, I hate to say it, but not much. You know, the way things have been done over the last 20 something years, it's pretty consistent. But what I have noticed is that, you know, the core itself is the heart of what drives the whole organization. However, you can see upwards of 40, 50, 60 integrations to third party vendors that, you know,

we become not only core conversion specialists, but we become system integrators where we're plugging in all these pieces. So if the core is a heart and you're doing heart surgery, it's connecting all the other vital organs that are making the organization run. Now, why is that? You know, people make their core better or businesses, credit unions, banks, whatever, make their core better by plugging in surrounds because the core is quite frankly couldn't keep up.

You know, some of the newer cores out there are 20 years old. DNA, where I came from, is almost 30 years old, although I think a little over 30 years. So when you look at that, that system has been pretty consistent, but all the really cool, fast-to-market surround products have made things a little bit more unique as we implement this.

Virginia Heyburn (03:59.278)
So the definition of what is a core banking system, that's changed a great deal over the last few years, as you've just described. And so given that, there has been this change. It sounds like core conversions can be far more complicated and nuanced. What led you to engage FI?

Anne Miela- EFI (04:19.393)
the culture, you know, I really, really feel like when I made this change from my last position, I really wanted to have an organization where I really matched the culture. we, from our perspective here, we want to be better or the best at implementing core conversions and different software, no matter what it is. And our commitment here at Engage to core conversions being more strategic.

helping our customers become more efficient and making things less risky. You will never ever have a perfect core conversion, mark my words. However, we can de-risk it and we help our customers and guide our customers in factoring in the risk of what they're putting in.

Virginia Heyburn (05:05.4)
Yes, and you said efficiency, and you and I have talked about this. This is such a big theme in 2025. Financial institutions are looking for efficiency. They need to free up some resources and capacity to be able to innovate, to be able to do more with the same resources or even fewer resources. given that it's so urgent and given what you said was the core of the foundation, it's the heart and soul of the financial institution.

How can financial institutions start thinking about core conversions as an efficiency play,

Anne Miela- EFI (05:40.869)
You know, great question. You know, when you look at it, I say there's like four things that I think of, right? That a customer focuses on. When we meet with our customers, you know, of course, what, how they define success as the software comes up, we're not, you know, impacting our members, our customers too much, right? They, they see an improvement. They're happy. However, there's other things that we have to measure success. An organization could be looking for more automated processes, believe it or not.

When we go and meet with our customers, there are still folks that are using spreadsheets. There are still folks that have sticky notes all over their computer. There are still folks that are writing things, believe it or not. So automated processes become key. That helps with efficiency, obviously. Data consolidation. Customers may have gone through mergers over the course of their tenure. And they could have four or five, six merged institutions in one.

you know, consolidating the data, you know, moving products around to make it more streamlined, more efficient for the frontline staff and quite honestly, the customers and members to select the products and services they want. Scalability, right? Growth. We're hearing a lot about mergers in 2025 and 2026. Virginia, you talked about that at our all-employee meeting. so scalability is going to be critical to them. How do they, without going to another core,

add more financial institutions, products and services, whatever it may be to allow for that. They need a system that allows for that. And then lastly, customer experience. It's super critical. know, as you see folks, the branches used to be super important in the day and they still are in many organizations and many demographics of our customers and members. But, you know, when you look at the next generation of folks that are going to be working and, you know, collecting wealth,

It's a digital and a personalized service type environment. They know what they want. They want it on their phone and they want to be able to do it. So customer experience is going to be critical. So those four pillars there help, think that we should, you know, as we go through every project or every event, we really need to sit down with our customer and see what is success defined as you. And I guarantee you it's one of those.

Virginia Heyburn (08:02.316)
And it's the business outcome that we're really after here. At EngageFI, we have a unique methodology, and I'd love for you to introduce our listeners to our methodology, what makes it different, and importantly, how does it support efficiency outcomes?

Anne Miela- EFI (08:19.521)
Yeah, great question. Thank you for that. The reason why I did also come over to Engage is to really help our customers because I've been on the vendor side my entire career. And with that being said, from a vendor perspective, you have a timeline, you have a project plan, and you got to get the work done within that timeframe, allocation of resources or whatever. And what I noticed is on the customer side, many customers have never ever gone through this.

Or maybe they've gone through it once and they did 25 years ago earlier in their career. So I think what I enjoy and I think what Engage brings is the guidance and advice. When I look at the folks that are on our team, the tenure, the places they've been, they've been at almost every single vendor that's out there. They have incredible experience consulting. And they also have banking and credit union experience. So we're able to bring all of that.

into one little package. We have fantastic tools that help us monitor risk issues. We're constantly looking at that. We use SmartSheets, which is a project management tool, which allows us to create really cool dashboards that your executive team can look at so you're not so far in the weeds. So I feel like we're very collaborative with our customers, understanding what success means to them, really sussing out.

what areas of their organization may need help. So, you know, if it's readiness or if it's back office or if it's training, you know, we can put extra effort on there. Besides the project leadership and strategic leadership that we provide, we also provide outstanding training and contact center services. You know, one of my colleagues here is an integral part of the team and it helps guide and advise our customers through there. So,

I think our experience is outstanding. The tools and plans we put together is fantastic. And the other thing is we're constantly trying to improve. After every event, there's always something that comes up and it's like, how are we better the next time? How do we make it more seamless for our customers?

Virginia Heyburn (10:31.726)
Annie, I was pretty lucky to get you on this podcast because I know you're very busy. You're doing a lot of great work with clients right now, so thanks for making the time. Can you speak to some of the results that our clients are seeing from the conversion work that we're doing?

Anne Miela- EFI (10:36.507)
Yeah.

Anne Miela- EFI (10:46.213)
You know, I think zeroing in on what are the successes, just as described, right? Operational efficiencies, Are measuring the efficiencies there. Are you getting what you came to a new core for, quite frankly? You know, also financial. You know, part of our business is doing vendor searches, you know, going back and looking to say, hey, are you getting the benefits financially that we negotiated initially? And we go back and do that as well.

I think really making sure that the customer is in a steady state after a go live relatively quickly versus it dragging on. those are some of the things that we look at really in digital, you know, their digital presence, you know, looking at have you expanded your footprint, you know, going to a new digital platform or going to a new core and really just assessing, you know, the targets that we put out from a collaborative perspective with our customers and making sure.

they're hitting the mark with those.

Virginia Heyburn (11:46.942)
Collaboration is really key. As you were running through that, I was thinking it's one thing for EngageFI or any consultant to bring a methodology to the table that's effective, that works, that delivers results. But in the end, a financial institution has to be ready for that process too. There's so much success riding on it. What does the financial institution really have to have in place for a core conversion to be successful?

Anne Miela- EFI (12:05.072)
Right.

Anne Miela- EFI (12:13.189)
Yeah, great question. think to me the number one thing and it may seem just obvious is strong leadership. The events that go really, really, really well is they have a really strong leadership team that is engaged but not too engaged. But the team that's working on the project knows that they have their back, that this is of strategic importance to the financial institution.

And quite honestly, Virginia, maybe a once in a career type project. you know, having the leadership back, the team, the other thing is clear vision. You know, knowing where you want to get to down the line. And it can't be like day one, you know, if you have a five year plan, what, you know, the kinds of products and services that you're adding and that vision is communicated down to the team. they know again, going back to what does success mean to you, Mr. customer on this project.

One of my favorites is accountability. And we're doing some work on that with our customers. There's a lot of folks that play a role on the teams for these projects. And we're really trying to help them become more accountable for their area. So not one or two people are carrying the burden for the whole organization. So every person that's participating from a team lead perspective is accountable and responsible for their area and making sure that they're ready.

Change management is super hard, right? So, conversions are not only hard work from a project perspective, but there's also a little bit of psychological or therapy that we have to provide as well. Change management is critical. Prepare your team for the change. So there's readiness and training and all that, but there's a lot of maybe back office processes or things that are gonna change or how you're going to service your customers or members.

And really quite honestly, someone's role, you know, before the conversion or the transformation may be a little bit different because the system is making it more efficient for them. you know, preparing the organizations for change management and lastly, you know, readiness. You know, I think get going through the tasks of doing a conversion, you know, we can checklists and do that, but is the organization really ready for that? And we've been working hard at that.

Anne Miela- EFI (14:38.353)
putting together what I'll call a syllabus of things that you need to know and you need to master when the switch gets flipped. That's a tongue twister there. Switch gets flipped. So are you ready to do that? So we're putting tools together and curriculums to help our customers guide and advise as far

Virginia Heyburn (15:00.462)
Let me ask you something, because again, there's so much happening in our industry with respect to a need to innovate. There new technologies that financial institutions want to be able to take advantage of through integration. And in a lot of ways, banks and credit unions really need to rethink their operational models. They need to make some pretty significant changes to the way they operate. And so to that end, I want to ask you to react to this statement.

Financial institutions need to transition from a product-centric model to a customer-centric model as soon as possible. It's a different industry in 2025. What are your thoughts when I said that?

Anne Miela- EFI (15:41.551)
I couldn't agree with you more. And based on what we're seeing and quite frankly, as a consumer of these services, what I want is more personalized service. I want to, when I sign into my digital application or I go into my bank or credit union, I want them to know what drives me to be a customer or a member at their financial institution. Digital experience first. And I think...

the personalization, the customer centric services that come along with, know, moving transitioning from an account based to a customer centric model is critical. I mean, think about it. You look at Twitter or you go to TikTok and your ForBU page is going to be all things for you, things that you're interested in looking at. Sometimes they're not, but most of the time it is. And that's the same thing with banking.

you know, quite frankly, when I get in, if I'm not a small business owner, I don't want to necessarily see things about small businesses. I want to see things about saving for college or, you know, buying a new car or things like that. So I think moving to this model is going to, you know, allow the financial institutions to be able to customize the experience for their customers and their members.

Virginia Heyburn (17:05.55)
Again, preaching to the choir, this is huge, right? We need to prepare for a world where the financial services industry is capable of delivering the bank of one experience where every customer feels like that they have a personal banker. They're being offered radically personalized service, tailored offerings, tailored offerings that are timely too, right? They're hitting at the right time.

when my need, when my desire arises as a financial services customer. Core systems play a big role in that. Having a core that can facilitate that kind of an interoperability model, the integration that's required, that is going to be key, which is exactly why so many financial institutions are contemplating core conversions. And Annie, just to close out, there was a recent study.

By the ABA, there was a core platforms report and it showed that there's quite a lot of dissatisfaction in the U.S. financial services industry with current core systems that are in place in these institutions. But at the same time, there's also a great deal of reluctance of these institutions to make a meaningful change because it is hard work. What would you say to those banks and credit unions?

Anne Miela- EFI (18:23.601)
It is hard work. You can't argue about that, but it's really about future-proofing. What do you need to do to secure your success for the future? To do that, it's a hard step to make that change, but you're right. I saw that study as well. The dissatisfaction in some of these providers is a little disheartening.

However, in order for our banks and credit unions to set themselves up for success in the future, they're going to have to make some changes. Some of these core providers can't provide a customer-centric experience. And quite frankly, a modern core is going to enable these customers to get to that customer or member centricity, which is going to be critical to...

create the digital experience and the personalized experience that I think the customers and members are demanding now. So it is a really hard choice when we work with our customers, everyone on our team knows that, you know, sometimes this is a career decision. You know, if it goes great, you're a hero and if it doesn't, you're not. So it's really, we get that, we understand that. And that's why we build everything we do about how we do to ensure that's.

Virginia Heyburn (19:51.926)
Annie, that's fantastic. I'm gonna allow you to get back to work with our customers on all of this, but I thank you so much for your time and your perspectives, your experience. We're thrilled to have you here.

Anne Miela- EFI (20:03.237)
Thank you so much, it was a pleasure.

Virginia Heyburn (20:05.778)
And to all of you out there listening, I also want to thank you, you the listener, for choosing Engage FI as your source of information for all things banking technology related. Please be sure to look out for the next episode of FinTech Unleashed. You will find information on that on LinkedIn, so follow us there. Until next time, have a great rest of your day.