Unlike in history, the term ‘legacy’ does not sound good or holds much value when it comes to relying on legacy systems in banking or any industry for that matter. When legacy or conventional methods of operating a system meets the modern-day requirements of customers, there is nothing but chaos and delay. In fact, when compared to the advanced banking solutions offered by booming fintech companies or neobanks, legacy infrastructure is proved to be mostly incapable, inefficient, and inflexible to meet today’s customer demands and predict the future of banking.
Business leaders strive to drive innovations in their organizations for which they need to be on par with the latest technology developments and customer expectations. Having said that, banking and financial institutions are expected to be more agile, secured, and user-friendly. So, trying to achieve these business goals and meet the soaring expectations from the banking customers, organizations should adopt and deploy time-tested technologies and digital innovations.
Before diving into why legacy modernization is crucial, let’s discuss the commonly faced challenges of banking and other financial institutions while sticking onto legacy systems and their outdated process and strategies.
Compatibility – The software designed for legacy systems is undoubtedly incompatible with the latest advancements in the banking industry and integrating them is out of the question. And for an industry like banking that cannot compromise on speed and performance, legacy systems are a bummer.
Performance – Trying to leverage a legacy system for new technologies to meet user needs that are changing in the blink of an eye is nothing but racing against time. Legacy systems are unacceptably slow for banking and fintech customers who want to make payments, transactions, or open an account promptly.
Reliability – It is a huge responsibility when customers trust banks with their money. Unfortunately, legacy systems cannot ensure security since they use age-old security protocols that lack updates and support. Eventually, it leads to security breaches and difficulty in meeting regulatory compliance requirements.
Neobanks are taking the banking and fintech industry by storm using their state-of-the-art technology to deliver high-quality software applications to their customers. On the other hand, traditional banks are trying hard to compete with neobanks to offer similar services and solutions to their customers. However, embracing legacy systems will lead to no progress and that’s exactly why it is time to give up legacy systems and start modernizing their core banking systems.
Legacy modernization will empower traditional banks to perform a wide range of banking services as a part of highly modern, robust, and scalable core banking solutions. Digitalization of traditional banks results in their agility and scalability to meet the constantly changing needs of their customers through seamless services and personalized engagement that drives loyalty and growth. The following are the major benefits of the legacy modernization of banks.
- Faster Customer Onboarding : Your customers can get rid of the never-ending onboarding activities while you deploy the cutting-edge technologies using Artificial Intelligence, Blockchain, Data collaboration, etc. Customer experience is based on the way banks engage with them and makes their life easier and better.
- Omnichannel Banking Experience : Your online and mobile banking software must be equivalent to the kind of services you offer at your physical banks. This simply means that their virtual banking experience should be seamless, highly secured, and personalized.
- Scalability and Flexibility : Your application software and sites can handle any number of users accessing at the same time. Cloud migration is proven to improve efficiency, support high seasonality, meet business cycles, and even reduce cost.
Neobanks are trying to replace the old and conventional methods of banking by offering a digital-first customer experience. It is high time that traditional banks should get rid of their legacy systems and focus more on modernizing them to cope with the services of neobanks while ensuring a seamless user experience and optimizing cost and improving customer retention.
A Realtime Success Story
This is how Aspire helped a client first global bank to seamlessly transform from their traditional ways of banking using our time-tested banking services to digital banking. Our legacy modernization services using robust Temenos products enabled the customer to meet the modern-day requirements of their end-users. We made it possible by performing the following:
- Developed self-service customer onboarding
- Implemented online and mobile banking
- Replaced legacy core banking with a highly modern and scalable core banking solution
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