Banks Must Ditch Legacy IT
Banks with decades-old IT systems are struggling to adjust to the changing regulatory and financial landscape.
Banks have had their reasons to put off modernization. In the pre-financial crisis years, with profits flush, there wasn't a big incentive to make the big investment and take the risk of a large modernization project. Instead, banks opted for smaller, less costly alternatives such as product or feature enhancements, which often added complexity to their environments
Additionally, during years of acquisitions -- there have been nearly 250 large mergers since 1990 -- most spending on core platforms was focused on integrating acquired banks' systems onto their own, rather than on improving capabilities. This left little time or dollars for simplification. The result -- a spaghetti-like maze of legacy systems -- was expensive to maintain but generally considered to be the cost of doing business.
But that is no longer the case. The banking industry's new world order is marked by regulations requiring greater transparency, more self-sufficient customers with rising expectations, stronger competition from traditional and non-traditional players, and relentless cost pressures. Read full story on InformationWeek
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