“Large retail banks with outdated technology face extinction unless they can replace IT legacies”
This is a bold claim made by Karl Flinders in a Computer Weekly article published in January 2014 titled Big banks’ legacy IT systems could kill them. Is it too late for retail banks to overhaul IT and survive?
Karl suggests an explanation for the unfortunate situation financial institutions find themselves in. Historically, he claims, banks have under-invested in their IT infrastructure during good times, when business was plentiful. These cumbersome IT infrastructures make it impossible for them to compete today, when more nimble alternatives are emerging.
To compete effectively, particularly in an industry reliant on technology such as finance, a business must innovate constantly. But how can innovation happen when legacy IT systems grind business agility to a halt? This isn’t simply a technical problem. Because of their pivotal role, ageing legacy systems constrain business innovation and are primary sources of operational cost and risk.
At Energized Work, we help our clients design and manage a strategic programmes of work focused on two areas: modernising legacy systems and creating sustainable innovation capabilities. We commit to, and deliver business outcomes. Some of our clients have experienced disruption first hand. Some are the disruptors.
Mohamed El-Erian talks about a similar trend in the financial sector in his Guardian article from April 2014 titled The democratic disruption of finance:
“Having redefined media, similar developments are slowly beginning to play out in finance – in a rather isolated way for now, but soon likely to start transforming how capital is mobilised and allocated in support of economic growth and employment.”
In a recent blog post, Zachary Townsend, co-founder of silicon valley venture Standard Treasury explains how his company views the legacy systems of large banks as a strategic path to market disruption.
When facing disruption, the most common choice, extending the life of aging systems, proves to be a poor long term strategy as it merely postpones the inevitable. Instead, businesses must have viable options to fight their way back to the top. Our expertise can provide you with these options.
In a new white paper titled Solving Legacy, we describe a unique stepwise approach to the modernisation of business critical, enterprise legacy IT systems. This approach provides a low risk, high throughput path to escaping the deadlock of legacy. It serves as a stepping stone to enable the innovation necessary for financial institutions to remain competitive with new players leveraging the latest technology to disrupt the market.
Are your legacy systems proving to be a business continuity risk? We’d love to hear how you’ve decided to deal with this challenge.
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