The pace at which technological advances are being made creates new opportunities as well as complications in an array of industries. Nowhere is this more true than in financial services. Cost burdens to maintain legacy systems and being able to adjust to fluctuating business demands in a secure manner has financial service organizations contemplating where to take their legacy apps in an ever changing fintech environment.
Many financial service providers struggle with updating their IT, and these businesses aren't alone: According to PwC's Financial Services Technology 2020 and Beyond: Embracing Disruption, 81 percent of banking CEOs worry about the speed of change in fintech. One of the main concerns here is legacy applications.
While legacy apps can provide critical functionality, decision-makers are weighing their options when it comes to keeping these platforms in place, or upgrading for something new.
How to Extend the Life of Critical Financial Services Apps?
This is a question being asked in numerous different circles in the financial service industry, and according to VMware contributor Manasee Dash, there is a clear answer.
"In banking, 'legacy' has made financial services IT leaders cringe for years," Dash explained. "The word conjures visions of aged IBM mainframes and green screens, piles of COBOL program printouts and entire floors of disk drives. In practice, most of that old tech is long since gone. But in truth? Legacy systems continue to have a place in financial services."
While the days of mainframes are thankfully behind us, many financial service providers are opting to maintain their still vendor-supported, legacy applications. This strategy can help organizations avoid the complications that come with a large-scale tech updates, including concerns about cost and maintaining industry compliance.
Considerations: Modernizing Underlying IT Infrastructure
However, just because legacy applications are still being used doesn't mean the organization shouldn't look to make certain modernizations to their current infrastructure. One optimal strategy to consider here is updating the IT systems that underpin legacy applications. An increasingly popular option here is the use of cloud services, which bring IT infrastructure into the future while maintaining important legacy platforms.
In fact, PwC reported that there has been a significant shift toward the cloud in the financial services industry, and this trend "is just getting started." Currently, more than half - 52 percent - of asset management CEOs consider the cloud to be strategically important to the organization. This is especially true when it comes to the support of legacy applications.
Another best practice to consider here is the modernization of the company-owned data center. While more workloads are certainly being migrated to the cloud, many organizations are opting for a hybrid approach, where the data center still plays an important role in overall infrastructure. Knowing when to make crucial data center updates can be an intimidating task, however. To see if your data center might be holding back your IT infrastructure, take this short assessment.
Finally, decision-makers should also consider partnering with a financial services IT solution expert specializing in custom support for cloud and legacy systems.
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