This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . The Bank of Ireland plans to invest €500 million ($588 million) in upgrades to its core IT infrastructures over the next five years or so, according to the Irish Times . Part of this investment will go toward updating its core banking platform, which will include support not only for new digital customer facing channels, but also advanced data analytics and compliance solutions. The updates highlight the bank’s intention to transform both its back-end functions and customer experience. Incumbents are increasingly realizing the need to upgrade their core systems in a rapidly-digitizing landscape. Bank of Ireland’s move appears to be in line with a recent trend of banks waking up to the notion that simply developing front-end digital products will not be enough if they want to compete with digital-native fintechs. North American banks, in particular, have been investing heavily in digitally transforming their entire businesses, but until now EMEA banks have lagged behind. The Bank of Ireland’s announcement, along with with Dutch bank ING’s recently publicized digital transformation efforts, suggest that European banks at least are acknowledging the problem. Digital overhauls of banks’ core systems are risky, but unavoidable. A quarter of attempted core banking transformations fail entirely, while half do not deliver expected outcomes, according to Cognizant — which estimates that only 25% of digital overhauls are successful. In spite of this, ignoring the need for digital transformation could leave incumbents far worse off, thanks to the growing threat from fintechs and new digitally focused challenger banks. The fact that Bank of Ireland is investing so much in this project suggests that it thinks the move is unavoidable, and we expect to see more banks reaching […]
