Community banks break the legacy lock to reach digital transformation

Digital transformation for community banks is a must as they confront mounting pressure from customers who want modern digital services, competitors that invest heavily in AI, automation and analytics, and governments and laws that continue to raise regulatory compliance expectations. In the face of these challenges, many remain constrained by aging core systems, inconsistent support and costly operations that make innovation slow and expensive.

The American Bankers Association’s 2025 Core Platform Survey found that 35% of community banks are dissatisfied with their core provider, often because of slow delivery, limited flexibility and high operational overhead.

Challenges facing community banks

Across the industry, community bankers consistently point to four major pain points, which can be attributed to providers or even their own IT staff:

1. Poor or inconsistent support
2. Overpromising and underdelivering on new capabilities
3. Frustration with issue‑ticketing systems
4. Aging or outdated technology

DXC’s approach — spanning open‑core modernization and outsourced banking operations — gives smaller institutions a way to innovate rapidly without raising costs or taking on high‑risk core replacement projects. That’s critical for community banks that rely far more heavily on third‑party core providers and managed service vendors than many larger institutions do or operate with lean IT teams.

Legacy cores aren’t the enemy — the inability to innovate on top of them is. With DXC’s CoreIgnite platform offering modern APIs and real‑time orchestration, community banks can integrate fintech companies, launch new digital financial products, modernize client experiences and improve customer service without replacing their core.

This solves two massive challenges:

• Pain Point 1: inconsistent support during integration or enhancement projects 
• Pain Point 2: vendors overpromising “innovation” that takes years to deliver

DXC CoreIgnite provides a more consistent and repeatable implementation supported by contract commitments, enabling the bank to innovate at speed.

And while CoreIgnite is newer, DXC’s broader core banking modernization partnerships demonstrate its reliability. DXC’s collaboration with modern-core providers like Thought Machine shows that community and midsize banks can adopt cloud-native capabilities quickly, launching new products like advanced mobile banking apps in hours instead of months — all managed through DXC’s end-to-end services.

Poor support and endless ticketing delays are universal frustrations for both community banks and their larger counterparts. For example, Banco Galicia, Argentina’s largest private-sector commercial bank, had to overcome an inefficient help desk, with too many escalations, too many onsite maintenance visits and inconsistent handling of employee requests.  

To turn this around, Banco Galicia outsourced portions of its help desk to DXC’s Business Process Services team. DXC took over support for business applications, branch PCs, infrastructure issues and more — eventually scaling support as the bank doubled its number of branches.

The results:

• Higher service quality at a significantly lower cost
• Faster resolution times across multiple support channels (phone, email, tickets, chat)
• A dramatic reduction in unnecessary escalations
• Improved consistency in handling IT inquiries

These improvements directly address frustration with issue‑ticketing systems, while also stabilizing IT service quality. For community banks grappling with limited resources and persistent ticketing backlogs, Banco Galicia’s experience demonstrates how the right support partner can turn chronic IT pain points into measurable service improvements.

Community banks spend an enormous amount of money maintaining legacy systems for payments, loans, cards and check processing. These systems are expensive, labor-intensive and slow to change.

DXC offers fully managed operations — everything from cards to payments to checks — giving banks enterprise-grade capabilities without enterprise-grade overhead.

DXC’s other work with a mid-tier bank also has clear implications for community banks: outsourced operations and scalable platforms can deliver cutting-edge digital services and modernization without capital-intensive projects, addressing Pain Point 4.

While the bank’s primary case centered on IT support, its modernization journey also included shifting to scalable, cloud‑centric platforms, resulting in:

• Faster time to market for new digital services
• Improved security
• Significant reductions in development and maintenance costs

Its digital transformation initiative cut service launch times from months to weeks and reduced downtime by 40%.

While not all community banks are in a position to migrate, some do require a core transformation to mitigate risk, reduce costs and provide the technology to better serve their customers and community. This includes launching new products and banking services at speed.

DXC’s modernization framework is trusted by some of the most complex financial institutions in the world, and we can leverage our extensive experience helping even large banks overcome legacy core limitations to help community banks do the same. It is a safe, incremental and proven path to modernization with a methodology and playbook that delivers:

• Reduced transformation risk
• Lower total cost of ownership
• The digital convenience to upgrade specific capabilities without a full core replacement

When community banks partner with DXC, they can gain:

• Modern digital capabilities without a core replacement
• Better IT support and dramatically improved resolution times
• Lower operational costs through outsourcing
• Access to enterprise-grade automation, fraud management and digital tools
• Freedom from the limits of legacy systems to remain competitive

Most importantly, they can return their focus to what has always set them apart:

• Relationships with their local communities
• Local decision-making
• Personalized service

Technology should amplify these strengths — not constrain them.