The banking sector has faced yet more criticism over the last few weeks for its so called “creaking IT systems”. According to Chief Executive of the Prudential Regulation Authority (PRA) Andrew Bailey, it’s time for the financial services industry to “address a patchwork of computer systems”.
In a past blog, we spoke about how 2014 may finally be the year for investment in agile IT solutions and with this latest round of criticism from the PRA, pressure is mounting for this to become a reality.
A further study by KPMG supports this. The banking industry is under pressure to keep the Government, investors and regulators happy but at the same time is stuck with inefficient technology that won’t adequately enable it to meet increasing demands. Apparently, these pressures are being exacerbated thanks to banks’ deployment of technology from the “dinosaur age”.
"...whilst banks are looking to invest in new IT systems, it is essential that they choose
the right IT strategy."
However, whilst banks are looking to invest in new IT systems, it is essential that they choose the right IT strategy. They need a strategy that will most effectively address their technology challenges, without adding unnecessary costs to their already strained budgets.
As is so often the case, banks are stuck with old, outdated legacy systems that result in inefficient and ineffective processes. This makes it tricky for them to easily adapt to changes in the market, as well as to ensure they are meeting heightening customer demand for high quality service. Andrew Bailey argues that “what would be a very bold thing to do is stripping the machine down and rebuilding it, instead of bolting bits together in complex fashions so you end up with a very complex architecture.” However, this ‘rip and replace’ approach can be extremely costly and time-consuming, not to mention complex.
Banks can avoid this major overhaul by looking at implementing a more agile BPM solution that can be laid on top of existing IT systems. Focusing on modernising the existing structure is a lot more effective and can save banks the major headache that ripping out the entire old system would bring. In order to connect their operational silos and centralise process management into one platform, banks can use flexible technology solutions. These allow unified dashboards, rules and process driven technology to be wrapped around existing infrastructure and centralise process management.
With pressure on the banking industry to deliver a high quality service, it’s important for banks to ensure they think carefully before making any major investments in IT. Making a rash decision and going for a quick ‘off-the-shelf’ solution means they may just be addressing one part of the problem and will have to keep updating the system as new issues arise – basically putting them right back where they started.