The biggest obstacle to modernizing a bank’s core systems often isn’t the decades-old software; it’s the decades-old silos between teams. Even the most advanced technology upgrade can stall if departments remain isolated. In fact, a 2021 study found that organisational silos were the primary barrier to improving customer experience in 54% of companies, outranking both budget constraints and legacy systems. This highlights a hard truth: technical change alone isn’t enough.

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Key Takeaways

• Core system modernization requires cross-functional teams that co-own outcomes across business and IT.
  
• Siloed departments introduce delays, misalignment, and compliance risks that hinder modernization success.
  
• Shared ownership and multidisciplinary collaboration accelerate delivery and reduce friction across the lifecycle.
  
• Aligning technology efforts with business goals ensures systems are built for measurable impact, not just functionality.
• Lasting modernization success comes from rethinking how teams work, not just what tools they use.

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For financial services leaders, modernization must be co-owned across business and IT, not confined to one silo. When business units, IT developers, compliance officers, and other stakeholders work cross-functionally, core system projects move faster, and fewer issues fall through the cracks. Every technical initiative stays aligned with strategic business goals. In short, core system modernization is only effective when organizations rethink how their teams work cross-functionally.

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Modernizing core systems requires new team dynamics

Upgrading core banking platforms is as much about people as it is about technology. Too often, banks approach modernization as an “IT project” and keep it segregated from business strategy. The result? Misalignment and friction. IT might deploy a new system perfectly, but if operations, risk management, and front-line business teams weren’t deeply involved, the solution can miss the mark. Projects bog down in handoffs and misunderstandings, or deliver features that business units don’t fully adopt.

Modernizing core systems successfully requires breaking those old departmental boundaries. It means creating new team dynamics where technologists and business leaders plan and execute side by side. When everyone from software architects to compliance analysts shares one vision and works in unison, modernization stops being a tug-of-war and becomes a shared mission. It’s no surprise that modernization initiatives led by cross-functional teams are over twice as likely to succeed as those run within a single department. When diverse expertise is united early and often, banks ensure their technology upgrades actually meet real business needs – on the first try, not the second or third.

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“The biggest obstacle to modernizing a bank’s core systems often isn’t the decades-old software; it’s the decades-old silos between teams.”

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Siloed teams undermine modernization efforts

Silos turn even well-funded modernization initiatives into uphill battles. When each department works in isolation, key dependencies and insights get lost, causing a cascade of problems. Here are some of the biggest ways siloed teams can derail core system projects.

• Misaligned goals: Each silo focuses on its own priorities rather than a unified objective. Without a shared vision, IT might deliver what it thinks is needed while business units pursue different outcomes, leaving the new system underutilized.
• Slow delivery: Separate teams and sequential handoffs slow progress dramatically. In fact, siloed organizations take 30–40% longer to bring innovations to market compared to those with fluid team collaboration. Modernization timelines stretch out when every decision requires crossing departmental barriers.
• Wasted effort: In a siloed setup, teams often duplicate work or tackle the same problems independently. Research shows as much as 15% of workforce capacity in large enterprises is consumed by redundant tasks created by poor cross-team information flow. That’s a huge inefficiency hidden in plain sight.
• Compliance blind spots: If risk and compliance teams operate apart from the core project, critical issues may be caught too late. This raises the chance of costly mistakes. For example, fragmented processes at one bank led to an erroneous $500 million payment that could not be recovered.
• Fragmented customer experience: Each department deals with customers in its own silo, resulting in inconsistent and frustrating service. Customers might get different answers from different teams, eroding trust and loyalty over time.
  
  

These issues impose a hefty “silo tax” on modernization efforts – more time, higher costs, and greater risk. It’s little surprise that only about 39% of organizations manage to successfully scale their digital initiatives across the enterprise. To truly modernize core systems, companies must first break down these internal barriers.

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Cross-functional collaboration accelerates modernization and reduces risk

The fastest way to overcome delays caused by silos and risks is to knit teams together across functions. Cross-functional collaboration means forming one cohesive unit that spans IT, business, operations, and compliance. This isn’t just a feel-good idea – cross-functional teams consistently deliver results that siloed groups cannot. Bringing all the right experts to the table from day one allows banks to speed up projects and avoid nasty surprises.

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 “Cross-functional collaboration creates a culture of shared ownership.”

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Faster delivery through unified teams

When everyone needed for the project is working in unison, decisions happen quickly and execution is agile. There are fewer handoffs and less back-and-forth because the core team includes stakeholders from each area. For example, instead of waiting weeks for another department’s approval, a cross-functional squad can resolve issues in real time. With all eyes on a shared goal, such as launching a new core banking module, momentum builds rapidly. A unified team can deliver results in a fraction of the time a siloed approach would take.

Built-in risk management and compliance

Embedding risk specialists and compliance officers into the core team significantly reduces project risk. Potential regulatory, security, or operational issues get addressed early in the design, not as last-minute fire drills. This proactive stance prevents costly rework and ensures the modernized system meets audit and security requirements from the start. For highly regulated financial institutions, having compliance “baked in” to the project team means go-live dates don’t slip due to unforeseen red flags. The team tackles risk collectively, so nothing critical falls through the cracks.

One team, one shared outcome

Cross-functional collaboration creates a culture of shared ownership. Because business and IT members are jointly responsible for success, there’s no room for finger-pointing or “us vs. them” mentality. Everyone is accountable to the same outcome (say, improving loan processing speed by 50%) and they measure progress with common metrics. This transparency builds trust across departments. When challenges arise, the team problem-solves together instead of retreating into silos. The result is higher quality solutions and a workforce that’s engaged and prepared to support the new system.

Aligning people and technology ensures long-term success

Crucially, a cross-functional approach doesn’t end when the new core system goes live; it fundamentally changes how the organization operates going forward. Aligning people and technology creates a foundation for continuous improvement. With multidisciplinary teams in place, banks can evolve their systems and processes iteratively rather than through rare, disruptive overhauls. The same collaboration that delivered the initial modernization can be harnessed to optimize features, address emerging needs, and drive further innovation. Treating modernization as an ongoing, shared journey rather than a one-off IT project helps organizations avoid slipping back into the siloed habits that caused their technology to stagnate in the first place.

This alignment also boosts adoption and adaptability. When staff from different departments co-create a solution, they’re naturally more invested in using it effectively. Training and change management become easier because the people who need to embrace the new platform had a hand in shaping it. Over time, the organization develops muscle memory for cross-functional teamwork. That means future initiatives – whether it’s introducing AI into operations or rolling out new digital services – will encounter less resistance and risk. In a highly regulated sector like banking, having your people and technology in sync is a strategic advantage. It ensures that modernization delivers not just immediate upgrades, but lasting agility and value.

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Electric Mind's approach to aligning teams and technology

Aligning teams and technology is not a one-off project; it’s a mindset that Electric Mind champions in every engagement. We assemble multidisciplinary teams of strategists, engineers, and domain experts who work side by side with your stakeholders from day one. This co-ownership model ensures that every technology initiative stays tightly aligned with your business objectives. It guides every step of the modernization journey.

We bridge silos and infuse engineering-led insight into strategy to help financial organizations modernize core systems faster without compromising on compliance or security. Our decades of delivery experience mean we navigate complexity with pragmatism. We tackle ambiguity and risk head-on so you see measurable results sooner. The outcome is not just an upgraded core platform, but a fundamental change in how your teams work: more agile, accountable, and ready for whatever comes next.

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