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Modernizing legacy systems in banking
How banks can succeed at core and app modernization
- New options for modernizing legacy systems in banking
- Where to start
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New options for modernizing legacy systems in banking
Digital innovations are disrupting the marketplace on what seems like a daily basis, leaving the legacy systems in banking decades behind. Customers today expect banks to provide the same kinds of breakthrough features and services they routinely receive from companies on the leading edge of digital innovation.
Unfortunately, existing core banking systems and applications—after years of underinvestment—haven’t been optimized to take advantage of new technologies and application management approaches. They’re simply not capable of supporting the market’s rising expectations and may soon expose banks to additional risk and liability. Also, operation and maintenance of those legacy systems is becoming more difficult and costly thanks to the small and dwindling pool of experts with the technical and institutional knowledge to support core systems developed for a different era.
These powerful market forces have created a clear need for system modernization. But many banks are still reluctant to upgrade their core platforms and apps. One reason is the central position those systems occupy in the overall banking architecture, which makes it likely that any changes to a bank’s core platforms and apps will have a widespread impact throughout the bank’s channels and operations. Also, until recently the only available option for system modernization was total replacement, making core banking platform upgrades a “bet-the-bank” decision.
The good news is that recent technology advances and improved application management approaches now provide banks with more options for modernization—and make the task much less daunting.
Where to start
Although you now have many options on how to pursue your modernization effort, wherever you decide to start is a smart choice—because anywhere you choose is better than not starting at all. The gap between digital leaders and banks hampered by their legacy systems is getting wider every day. And the challenges, costs, and risks associated with operating and maintaining outdated core systems and applications will only increase the longer you wait.