As early adopters of technology, banks now find themselves saddled with legacy systems and face the need to replace them
“Nearly 50% of banks do not upgrade old IT systems as soon as they should, according to a report by the UK’s Financial Conduct Authority (FCA). And, 43% of US banks still use COBOL, a programming language dating from 1959”
- Why banks can’t delay upgrading core legacy banking platforms. Ernst & Young. June 2019
Banks' legacy systems are big and complex. As a result of modifications and "patches" to meet a wide array of requirements, inadequate documentation and staff turnover, over the years, knowledge is lost and the systems become harder and harder to maintain. Any change to the systems will require significant time, resources and effort for impact analysis and regression testing. There will also be significant risks. As most legacy systems were not designed to connect well to external systems, they become huge impediments for the banks' digital transformation efforts. It is no wonder then that big banks embarking on digital transformation are spending hundreds of millions, if not billions of dollars.
What if digital transformation can be achieved at a fraction of what the big banks are spending?