The Abstract Art of Digital Banking Transformation [Podcast]
Having to do more with less is not a new challenge for enterprise IT. For the financial services industry, the cost of maintaining legacy systems accounts for about 75% of a bank’s annual tech investment, leaving only 25% to spend on new technology and innovation. This is the reality that’s frustrated senior business leaders for a long time; it’s not that there is a lack of vision for how to innovate and engage differently, but that they’re hamstrung by maintaining legacy environments.
To be fair, there are technologies in those enterprise legacy stacks that are not easily replaced. For instance, there aren’t many manufacturers of multi-currency accounting systems that can service the needs of a capital markets provider. As a result, there are components that exist within many enterprise IT environments that require a lot of maintenance. The challenge financial services institutes (FSI) face is how to deal with legacy components while dealing with the pressure from customers, shareholders, and executive leadership to transform and innovate.
This is where the idea of creating a digital overlay comes in; a strategy many innovative banks and capital markets providers are employing. This approach can drive more value out of the 25% of budget that is available to innovate.
“This strategy isn’t just about replacing a single piece of technology with something better, it’s about wrapping the legacy architecture an organization has invested in to create an abstraction layer that allows us to do something that’s more value-adding and compelling for customers.”
In part 1 of Appian’s latest podcast series, I introduced the concept of leveraging a digital overlay as a core capability for enterprise environments. In part 2, I discuss how to incorporate this strategic approach to enable end to end business process improvement to deliver greater collaboration and a seamless experience across the value chain, both inside and outside of the organization. Take a listen to part 2 below and learn more about these topics and more, including:
- Breaking down silos and bridging legacy systems with new technologies
- The regulatory environment and its role in shaping modern enterprise environments
- The next big trends for Financial Services in the coming year
- How enterprises can take on future challenges without a core IT overhaul
Listen below to part 2 of this 2-part series.Part Two: How Financial Services Institutions Can Thrive in the Age of Digital Disruption
If you missed part 1, be sure to listen and learn more about the challenges bankers are facing across the enterprise and how they’re responding to be more transformative. Listen here.