Elevating credit unions: Transforming core banking on the AWS Cloud

Credit unions play a crucial role in communities by providing a diverse range of financial services driven by their members’ needs. These services, supported by core banking applications, form the backbone of credit union operations.

Traditionally, credit unions use legacy systems for their core banking applications, such as lending, payments, and deposits. But these systems are monolithic, expensive, and lack open architecture, impacting credit unions’ abilities to deploy changes based on market demands. In this digital age, cloud computing offers a transformative solution, and as we will explain in this post, Amazon Web Services (AWS) stands at the forefront.

How credit unions benefit from AWS

Credit unions are positioned to benefit significantly from migrating their workloads to AWS compared to traditional on-premises solutions. AWS provides unparalleled scalability, reliability, and security, essential for the uninterrupted operation of core banking systems. By using AWS services, credit unions can achieve greater agility, cost-efficiency, and innovation in their operations.

AWS has robust security features, which are paramount in safeguarding the sensitive financial data entrusted to credit unions. With industry-leading security protocols and compliance certifications, data remains protected against evolving cyber threats with AWS’s infrastructure. Features such as encryption, identity and access management, and network security fortify the infrastructure, and provide credit unions with peace of mind regarding data integrity and confidentiality. Further, we provide specific guidance to credit unions on payments fraud prevention on AWS and evaluation of FFIEC compliance on AWS.

Moreover, the global infrastructure of AWS delivers low-latency access to services, enhancing the member experience and facilitating seamless transactions. With data centers strategically located around the world, AWS delivers high availability and reliability, which is essential for the 24/7 nature of financial services. We also provide guidance for disaster recovery and business continuity through our guidance for core banking backup and disaster recovery on AWS. This distributed architecture not only enhances performance but also mitigates the risk of service disruptions to prevent uninterrupted access to banking services for members.

Specific strategies for core banking providers

Today, many popular core installations may already be deployed in AWS using our Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Relational Database Service (Amazon RDS), offering enhanced availability and resilience. For installations requiring IBM-specific technologies, customers can procure solutions through the AWS Marketplace to facilitate low-latency connectivity to AWS Regions, enabling optimal performance through Layer 2 connectivity directly to AWS. Cores requiring deployments on Db2 can be deployed using Amazon RDS for Db2.

When considering strategies to elevate their core banking application, credit unions should consider the following:

1. Migrate existing cores: Credit unions can migrate their existing cores directly to AWS using Amazon EC2 and Amazon RDS, benefiting from AWS’s robust infrastructure and services.
2. Explore AWS native core banking guidance: Our guidance for building a core banking system on AWS provides a framework for financial institutions to use as they build a modern core banking system using native AWS services. With a modern cloud-based core, credit unions can be more agile and innovate to better serve their financial services customers by adding new functionalities and releasing features quickly
3. Packable offerings in AWS Marketplace: AWS can facilitate the deployment of current customer solutions as packable offerings in AWS Marketplace, enabling credit unions to access and deploy core banking systems. The solutions offer native cloud deployment options, providing credit unions with a modern and scalable alternative to traditional core banking systems.

Moving forward

Deploying core banking systems in AWS represents a significant opportunity for credit unions. By partnering with AWS, credit unions can enhance member service, extend their operational capabilities, and streamline back-office support. AWS is invested in supporting our credit unions customers, demonstrated through our cloud-based credit union solutions and strategic partnerships through the AWS Partner Network and AWS Marketplace. AWS also provides dedicated support through our AWS Account Teams specialized in working with Credit Unions, as well as hands-on support through our AWS Professional Services teams.

Migrating core banking systems to AWS offers credit unions a pathway to greater efficiency, scalability, and innovation. AWS’s robust infrastructure, coupled with its extensive portfolio of services, positions it as the ideal partner for credit unions seeking to modernize their operations. By embracing cloud technology, credit unions can better serve their members and drive sustainable growth in the digital era.