Community bankers' core conversion words of wisdom

A core conversion is a complicated endeavor. Not only does it require completely changing how your bank operates; the process isn’t over once the new system goes live. Even so, the work can be worth it when a new core banking system helps banks improve operations for customers and employees, enables innovation that makes work easier for employees, gives customers the level of service they’ve come to expect and supports new products to take them into the future.

We spoke to community bankers about their experiences with core conversions: the challenges they faced, what they learned and what words of wisdom they can offer to other community bankers who are in the thick of it or are about to be.

Before moving forward with its core conversion, PeoplesBank spent years evaluating its decision. In 2020, the $4.5 billion-asset bank launched ZYNLO, a digital-only bank targeting Gen Z and millennial customers, and it did so using a newer core provider—not its legacy core. The executive team initially had no intention of changing that legacy core, says Aleda DeMaria, but after launching ZYNLO, they realized what was possible with newer technology.

Knowing the exact restrictions of its legacy core helped give leaders a vision of what a conversion would allow them to do, which incentivized them to stick with it.

“You really have to identify why your current core is restrictive,” DeMaria says. “Be very surgical about what your core is not allowing you to do. The executive team had a lot of discussions to say, ‘These are the things we are unable to do in the way that we want to do them. Do you want us to continue down this path of being innovative and forward-thinking?’ The executive team and board made the commitment that we wanted to thrive and not just survive.”

Neighbors Bank converted its core in 2024, but planning started months before. That’s because Melissa McNutt, CEO of the $115 million-asset community bank, knew preparation, especially when working with data, would make the transition smoother.

The team focused on ensuring their data was clean and in a format that could be transferred over to the new system. If it wasn’t, they knew it would create more problems after the new core was in place.

McNutt says they also tested mapping data before doing the actual conversion, so everyone would know their role and that it would work.

“I strongly believe that with any conversion, success is determined months beforehand with clean data,” she says. “If you put bad data into your system, it’s not going to be good. We made sure that our data was as clean as possible, which was really important and took time. Our data came over very clean, and we felt good when we got into the system that we were able to very quickly verify our data, and that it mapped correctly.”

The Callaway Bank had been working with the same core provider for decades, even though the core didn’t always run well. Over the years, the $510 million-asset community bank had created workarounds just to keep the system afloat. Trying to work with third-party vendors became agonizing (and that’s if the legacy core provider even allowed the partnership to happen).

Overall, the bank’s leaders felt they were being held back because they couldn’t take advantage of cutting-edge solutions that would improve operations to make working easier and elevate the customer experience.

When converting the core, Callaway Bank’s project team kept their eyes on the prize: things like faster operating systems, third-party vendor integration and the ability to innovate in the future. They did so while reminding themselves that the system they had wasn’t working as well as a core should, and the conversion would be a challenge, but that it would be worth it in the end. And it has proven to be.

“We were spending so much time doing our own workarounds,” says Jeff Jones. “It’s like we’ve got chronic pain, where a patient is in so much pain they don’t even realize how bad it is anymore. We took the same view of conversion: It’ll be like surgery. It’s going to hurt for a brief moment, but afterward, it’s going to feel amazing.”

Community Spirit Bank converted its core because leaders felt its older system was antiquated and that the bank would fall behind if it was limited by the capabilities of an older system.

While she’s glad they’re on the other side of the conversion, Emily Mays says it wasn’t a cake walk. The $225 million-asset community bank’s conversion would require a complete overhaul of its digital banking platform and for its customers to be issued new debit cards. Mays had also spoken to peers at other banks who quit their jobs during their core conversions because they were so frustrated with the process.

Mays wanted to make sure that didn’t happen at Community Spirit Bank. That meant keeping lines of communication open and encouraging employees to share their problems and frustrations with the process. That also meant making sure those issues were addressed quickly, even if it meant escalating something immediately to the CEO.

“Take care of your people who are taking care of the bank,” Mays says. “They are going to be the ones really putting in the work during conversion—and post conversion, when things are breaking—and troubleshooting. They’re spending extra hours and time out of their day. Your people need to feel supported.”

Legends Bank knew converting its core was going to be a heavy lift, but it was necessary for the future health of the bank. To make the undertaking easier on the bank’s employees, leaders decided to have some fun with it.

The $940 million-asset community bank called the project “Mission: Possible” and created videos with senior team members dressed like characters from classic spy movies, like James Bond and Mission Impossible’s Ethan Hunt. CEO Thomas E. Bates says it was important for him to be part of it, too, which is why he took on the role of Dr. Evil from Austin Powers.

Funny skits didn’t solve every core conversion challenge, but it did help bring the bank together and lighten the mood. When the CEO invites his bank’s employees to laugh at him, how could they not?

“Just make it fun at the very beginning, and then keep that communication theme throughout the process,” says Bates. “We did a big elaborate video at the start, and then we still did more videos in character when we were going to roll out the next phase. People started enjoying getting to see those videos, because senior management was willing to look silly, just to get you to hear what you need to buy into this. It was pretty well received.”