These are the legacy issues preventing banks from moving to digital

The legacy issues preventing banks from making the move to digital are predominantly related to skills, capacity, systems and strategies. These are all necessary for going down the route needed to integrate digital systems and legacy systems.

Banks’ organisational structures need to be assessed for skills and development capacity, software implementation, IT infrastructure and IT teams. Overall, a bank’s organisational strategy needs to accommodate digital.

Within banks there are various independently run divisions in an accelerated model. Banks need to connect all these divisions. However, they are faced with various issues which include the maturity of network infrastructures, process governance change management, enabling enterprise content management and security.

Silo-thinking has informed the way in which banks organise their legacy systems. Banks are organised with different silos for different aspects, products or services. Legacy systems are often older systems which have been in place at banks for a year or longer. Once a new system is released, or becomes commonplace within the banking sector, old technologies become obsolete.

Bridging the gaps

What’s required are solutions that bridge the gap between enterprise content management systems, BPM and process orchestration. The aim is to make sure that information — such as consumer banking data – is efficiently processed, in order for various systems to produce desired results.

The role of middleware is to curate data in a quick and reliable way to users. Therefore, middleware can be defined as integration, human process orchestration, and content management involving a software base. This software base can involve unified portals for banking information and identity management.

The banking process, such as customer management, will start digitally with the user interface or form in a mobile app. The required information, customer banking records, are in various data centres and silos. This customer data could range from core banking to vehicle and asset financing information. Transferring data from legacy to digital systems can be quite difficult.

Legacy systems need to be secure especially when a bank wishes to move forward with a unified digital strategy. Typically such strategies involve newer technology. Older legacy systems have complex security patterns which need to be considered when moving to digital solutions.

Problematically, legacy systems are typically batch-driven which does not suit digital solutions. Legacy systems are pulling collective sections of data. In contrast, digital systems are able to select unique pieces of data relevant to user interest.

This can further be illustrated by looking at one of the major problems in banks which is processing payments between institutions. This is a batch-driven process and as a result of being archaic in nature takes much longer than what is capable via digital means.

Some companies are able to implement roadmaps where network architecture and server architecture are addressed. This leads to the development of a core where business process management (BPM) and content management can run smoothly, effectively bridging the divide between digital and legacy systems.

Optimised infrastructure
Well-performing middleware leads to banking infrastructures that are stable and optimised. This should be the main aim for banks. The digital process where possible should be automated for customers banking online. When a customer accesses banking information, the activity can be sped up through good BPM practices and enterprise management.

Through automation, via middleware, transactions can be instantly processed, and limited issues can be experienced. Only in exceptional cases will a human user be involved, such as when problems arise or a verification is required by a bank employee. However, the load on human users is lessened. Maintaining this on a twenty-four hour basis, without fault, is a major challenge.

If a good middleware base does not exist, the route followed will be one where systems and solutions within a bank do not scale in effectiveness as a bank grows. With middleware, a bank can more effectively bring digital on-board and incorporate legacy systems with newer digital technology.

Remember the customer experience
It needs to be stressed that the customer experience is heavily affected by gaps between legacy and digital systems. A consistence experience across platforms is key. The quality and speed at which a user gains access to information needs to be maintained.

Solving issues between legacy and digital systems makes banks more competitive, by opening up new markets. New customers want digital platforms from top-performing banks, be it mobile or internet banking.

The experience needs to feel seamless and instantaneous, whether it be for personal or business banking. Digital platforms utilising legacy systems need to be fast and effective when processing transactions.

Banks also need to have a full ecommerce element to their websites to compete in the space. Digital value-added services complimentary to the banking experience are now considered givens.

The future of banking

Currently, the banking space is one where customers want instant transactions, without restrictions. Banks, such as Standard Bank and Nedbank, are embracing the middleware approach and it is accelerating their move towards digital platforms. They have been able to roll-out new capabilities with mobile platforms.

Being open to new technologies is the way forward for banks and will aid in supporting the move from legacy systems to fully digital platforms.