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To compete in the digital market, banks and financial institutions need to consider a customer-centric approach. This approach should be backed by data-driven processes and powered by agile systems.
46% of bankers see the legacy systems as the main barrier to the growth of commercial banks.
Everywhere you turn, digital innovations are disrupting the marketplace, leaving the legacy systems in banking behind. Today, customers’ expectations and demands have grown immensely, where customers demand the same kinds of features and services they routinely receive from companies on the leading edge of digital innovation.
It might come as a surprise, but many banks that started back in the 1970s or 1980s relied on a few obsolete technologies within their core banking processes. But with time, and the evolving market scenario, the need for digital solutions and agile software architecture has replaced traditional systems.
There is constant development in the technology space, and today we have Artificial Intelligence, Machine Learning, Data Analytics, Connected devices, and Open APIs morphing into mainstream business processes.
Since the legacy systems cannot support the rising expectations and there is a visible slump in revenue, banks and other financial institutions are looking to modernize their systems. The traditional legacy systems also weigh heavily on the overall operational cost and maintenance, combined with the lack of experts who can resolve issues arising within them.
According to Deloitte’s 2019 Banking and Capital Markets Outlook, the first two orders of business for banks are updating their digital capabilities and modernization of legacy systems. These two categories alone make up 51% of banks’ focus in the coming year.
We are in an era when the need of the hour is speed to market, constant innovation, and business growth. Modernizing the legacy core banking systems becomes even more critical, as it could help businesses stay ahead of the game and achieve business goals. The main reasons for modernizing legacy systems are to:
Top 7 Benefits of Modernizing Legacy Systems
In the study Financial Services Technology 2020 and Beyond: Embracing Disruption, PWC has shared that banks & financial institutions should adopt few elements as quickly as possible. One of which is core banking modernization, followed by the use of modern software architecture. Banks need to upgrade their systems to meet the digital standards of the market, adapt to change swiftly, and reduce costs.
Benefits of Modernizing Legacy Systems
Modernization of the legacy systems allows end-to-end support of all digital features and capabilities that the bank adopts.
There is a visible reduction in dependency on expensive and scarce legacy specialists. The low code digital solutions also offer a better tech environment for the younger developers.
Improved service levels, product innovation, and enhanced customer satisfaction.
With modernization, banks are assured of complete adherence to regulatory compliance and therefore experience lower internal controls risk elements.
There is a drop in service delivery costs from the early stages of modernization. There is also optimization of resources, improved productivity, and efficiency. Modernization also allows banks to shift from a “customize” to a “configure” deployment model that helps with reducing investments.
By adopting data analytics and advanced automation, including cognitive automation & RPA, banks can open doors for new business opportunities with their customers. The process also improves the process cycle time and launch of new applications.
Adopting cloud-based solutions will enable banks to achieve flexibility.
Neutrinos Helps to Modernize Legacy Systems
We all know banks face a wide variety of challenges – across regulations, rising customer expectations, and changing competition, to name a few. But then, there are advanced technologies available to address these challenges.
Modernization of the core banking systems is where the transformation journey begins. Banks need to redefine their strategy and look towards a software architecture that will ease the development and deployment of digital solutions and provide a flexible and dynamic environment.
With an array of solutions designed exclusively for the BFSI sector, Neutrinos has helped enterprises with their legacy modernization efforts. For one of our clients (a leading insurance company), policy sales took 20 minutes per policy, and their system was not user-friendly. We helped them with their legacy modernization which took just six months to go live, and today, sales on the new platform take just 8 minutes! Other benefits include:
Modernizing legacy systems will transform banking and offer enhanced customer experience. Adopting digital solutions will enable banks to personalize products and services for their customers.
Read the blog “How to avoid legacy trap with low code?” for more information on legacy modernization.
Neutrinos, through its low-code, multi-experience development platform will help you modernize your legacy systems and grow your business. Neutrinos also offers banking solutions to optimize banking processes.
Are you looking to modernize legacy banking systems?