Breaking the chains of IT legacy
In retail banking, as in any sector, legacy IT can eat up budgets; limit the CIO’s flexibility to innovate; and reduce the talent pool for technical development. But there are solutions to help break the legacy chains.
Peru’s survey of Retail Banking IT leaders ‘Turn to Face the Change’ highlighted their concern that legacy IT was one of the biggest barriers to modernising customer facing processes. In fact, almost one quarter (21%) of the technology leaders questioned thought their organisations’ legacy systems were too difficult to change.
However, the world of retail banking IT doesn’t need to be this way. Peru Consulting has regularly helped organisations build a step by step strategy to the future.
While realistic investment is essential, the rewards are are indisputable and it all starts with building a business case.
A positive first step is rationalisation of the technology base, which can highlight legacy technology and identify unused systems. Technology consolidation comes next, identifying both infrastructure and application inefficiencies and using Virtualisation and Cloud migration to deliver significant infrastructure cost savings.
Finally, a standardisation process which requires the negotiation, or re-negotiation, of strategic vendor deals and focused IT estate governance.
As systems age, patches are less available with vulnerabilities arising as systems go 'out of support' or End of Life. Without investment in modernisation, risk of system failure or security breaches increases - a particular nightmare for retail banks.
Business continuity is also at risk, leading to long-term damage of business reputation. Risk reduction is best managed by a regular refresh of applications and technology.
With a compelling business case in place, retail banking IT teams should be asking “what does the standardisation plan look like”? A Total Cost of Ownership Review can help to answer the questions, along with a number of key components for building a solid platform for standardised technology infrastructure:
Geoff Mellor is a Principal Consultant at Peru Consulting and specialises in IT Strategy and Architecture. He has worked with organisations including ABB, Syngenta and AstraZeneca.