The $90 Billion Bank That Rebuilt Itself: Lessons From Zions Core Overhaul
By Justin Estes, Contributor at The Financial Brand
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Executive Summary
- When most banks consider core system modernization, they plan incremental upgrades or phased replacements. But what happens when a $90 billion institution decides to replace everything at once?
- In an episode of the Banking Transformed podcast recorded live at The Financial Brand Forum 2025, Zions Bank CIO Jennifer Smith tells host Jim Marous about the decade-long journey to overhaul the bank’s core banking infrastructure and the competitive advantages it’s created.
Transforming All at Once
Q: What led Zions to decide on a complete core transformation rather than a phased approach?
Jennifer Smith: I want to set a bit of context about core banking systems. I recognize that in community banks and credit unions, you may be using Jack Henry or Fiserv and Bank in a Box solutions — in our organization and larger regional banks and national banks, we have separate cores for every type of product deposit and the suite of products around the deposit system: consumer lending, construction lending, commercial lending, of course, business making.
So, each one of those was a separate vendor and separate data structure and all of these systems (we are not unique, as you know) were built on architectures from the 1960s and 1970s. They were designed for a time when there was a dumb terminal in a branch that had a direct connection into a data center and work was flown from branches overnight to regional processing centers. That’s the base on which many of our core banking systems were built.
Fortunately, our CEO and board had the foresight to see that this is not the kind of technology that would move us forward. They understood even at that time that changing out the core was what was going to position us for future success. There aren’t many banks of our size or larger that have done that yet. And so, it was a real foresightful play on our CEO’s part.
Q: Looking back, would you have approached the scope differently?
Smith: Well, we chose a platform that did it all. We were thinking of an entire platform approach. I came in as CIO after those decisions had been made. And it’s a really good lesson; maybe I would’ve done something differently than the person in charge of making the decision. But we had committed as a company and as an organization to move forward.
So, we don’t always have the opportunity to craft from beginning to end how we want something to be, but in retrospect, it would’ve been wise even to use the same platform to break it into more discreet initiatives. With an evident vision first of what we wanted to achieve. And then with that vision, I likely would have taken it in discreet projects.
Managing a Decade-Long Technology Overhaul
Q: What was the biggest challenge in sustaining momentum during such a lengthy transformation?
Smith: The hardest part was sustaining the organization’s hearts and minds toward what we’re trying to accomplish. On any large initiative, in the middle, it gets hard and the wins aren’t as apparent yet because we may not have delivered anything. There’s a diversion of resources to this major initiative compared to others.
So, the hardest part is to remind people this is what we’re going to achieve and we are going to achieve it. And this is what it will mean to our organization and to the industry. Just keep painting that story.
We were really fortunate to have a CEO who spoke about this in every quarterly, all-employee meeting and what we were trying to achieve. That didn’t happen by accident. We were really intentional about having our entire executive committee engage us. This is our very first priority.
Q: How did external factors like COVID and the regional banking crisis impact your timeline?
Smith: We always knew what the core would have to deliver, but there were some pivots along the way. So, the regional banking crisis of 2023, with the failure of SVB and First Republic, impacted us.
We were en route to market with our first release and we thought customers would get spooked if there were so many hiccups in our delivery. So, it delayed us by about six months. And then during COVID, we lost another six to nine months because we had people who were not able to work.
Building the Right Team and Culture
Q: How did you select and retain the right talent for such an unprecedented project?
Smith: When we started on the initiative, because we said it was the company’s top priority, it required us to act like it was. We took people who are known as being the very best talent from anywhere in the organization that had some expertise that we needed, perhaps in lending, perhaps in deposits and we put them on the project because we wanted new thinking about how we could solve, reimagine our business processes to make sure we didn’t implement what we had before in these new systems. So, first, we had the very best talent in our organization.
Early on, we hired some people from the outside who were also really fantastic, but we also found that we weren’t having the communication within our organization’s culture that we needed. So, we had to make some changes there. The first couple of years were a bit bumpy. Then, we brought in people we had seen perform; we had seen their results from outside the company into our organization.
This team, a technology transformation, was over 50% female and highly unusual. But I think that equal parity enabled different types of thinking. We had divergent thinkers and convergent thinkers. We had people who were really good at rallying the troops, recognizing others and collaborating.
Interestingly, because of the recognition and celebrations of wins on the program itself, our turnover rate was 3%, which was extraordinary.
Q: What role did leadership communication play in keeping the organization aligned?
Smith: Some surprises would pop up during the communication. I start with where we failed early on, from the onset. We probably had about 75% full commitment from our executive committee and didn’t recognize a couple of places where we didn’t have alignment.
Dig Deeper:
- An Inside Look at Zions Bank’s Core Systems Modernization
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That slowed us down some in communicating with our company, so we had to correct that. I would say spend a lot of time with your CFO. Because it’s so expensive and there will be needs there, unexpressed needs, or things may be approved, but there could be some doubts about how the numbers are going to look overtime — I should have invested more time in going much deeper than any other initiative we’ve ever done with our CFO.
Navigating Regulatory and Compliance Hurdles
Q: How did you work with regulators who hadn’t seen this type of transformation before?
Smith: Having compliance at the table from that time was critical. Half my career was in risk and audit roles before I moved into technology and operations. And so, I embrace risk compliance by being right at the seat and sitting at the table as we go along. We requested that the very best compliance and risk experts participate.
They were very skilled in their thinking and discerning risk. They were right there with us and we didn’t have any issues around first in market for this provider in the U.S. from a compliance standpoint because we partnered so strongly with our solution provider.
Regulators were a different story because they hadn’t seen partnerships with a global provider. That made them nervous as well and we had to work through that with them. It’d be no big deal, but it was a big deal.
Q: What was your approach to managing the regulatory expectations during the process?
Smith: Because it requires an enormous amount of time and resources, it requires a significant share of your executive team’s attention. They were concerned about the amount of change we were taking on, but we still had sub-regulators saying, “You’ve got to address your cores.”
And we’re like, “We’re the only ones addressing our cores like you suggest.” And then you’d have someone else come, “You have too much change running through your environment.” And so, we were in this constant dance with them, but we kept the regulators very well-informed about what we were doing.
Positioning for Future Growth and Innovation
Q: What competitive advantages has this transformation created for Zions?
Smith: One is that we see a competitive advantage for us going forward and every bank will have to do this at some point. You just can’t live in these mainframe-centric worlds.
As our story demonstrates, they’ll go a lot faster, I’m sure. But it is a huge investment of time and attention and we don’t have that burden on us anymore. We were running about 50% of our investments in technology and new investments were in this space — that’s freed up now for us to bring new innovations to the marketplace, where our competitors may be kicking the can down the trail; some of them are investing in this.
Q: How has this positioned you for acquisitions and new product development?
Smith: We are now entering growth markets where we expect that we’re going to be able to acquire banks at a rate that we haven’t seen in, okay, well over a decade. And so, we can move those banks into our environment much faster than before. We just completed the conversions of an acquisition we announced in September of last year. That’s been completed.
We also, because we have real-time processing capabilities, now have our data in a state that we migrated over 140 million records. We had to normalize all that data and it’s in our data warehouses, so it’s in such a great state. That positions us well for AI, generative AI and then we can deliver new features and functionalities about 40% faster.
No one would really think that your core plays that type of role. But we can get new products to market, like new deposit products, within a few weeks, versus investing a year to bring something to market. We can move a lot more quickly.
As the banking industry grapples with aging technology infrastructure, Zions Bank’s journey offers valuable lessons about the complexity, commitment and ultimate rewards of comprehensive core system transformation. While the path was longer and more challenging than anticipated, the emerging competitive advantages demonstrate the strategic value of making bold technology investments.
