Common Pitfalls of Banking Legacy Modernization

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Common Pitfalls of Banking Legacy Modernization

• Copyright by Jmrinfotech.com

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• The world of digital banking solutions is
  changing. Customers are becoming more educated
  and demanding, and the need for innovation is
  greater than ever. Legacy modernization is a
  process that is making it easier for banks to
  stay competitive in the modern world, and
  upgrading it is a complex and daunting task. The
  process can be made easier, but there are some
  common pitfalls that banks need to avoid. They
  include

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1. Lack of transparency in digital transformation
processes

• A big problem with banks and the way they manage
  digital solutions like the Oracle digital banking
  experience is the lack of transparency. Digital
  transformation involves a lot of moving parts and
  many handoffs. If a process isn't clearly defined
  and communicated, there's a good chance that it
  will fall apart.

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2. Misunderstanding of the goals of modernization

• There are set goals for modernization projects,
  and then there are the project goals that each
  team member thinks the goal is. Without the
  correct goals, a team will end up heading down a
  path that doesn't deliver the intended results.
  Getting the two to mesh accurately is a crucial
  challenge.

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3. Implementation challenges and unintended
consequences

• Another major pitfall of legacy modernization is
  that companies often don't put the necessary
  components in place to ensure the successful
  maintenance of older applications. We're big
  advocates of having a dedicated team of
  developers working side-by-side with the
  business, as they'll be the ones to eventually
  work on the platform every day when
  under-the-radar issues pop up.

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4. Resistance to change by employees and customers

• The emergence of new technologies in banking can
  be a challenging time for employees and customers
  alike. Consumer expectations are constantly
  evolving, and mobile banking is a great way to
  stay ahead of consumer demand. If it's not
  available, you'll be immediately giving customers
  an excuse to look to your competitors. 

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5. Lack of communication and collaboration

• Difficulties in communication can drive customers
  crazy, but it's even worse when your company
  isn't even communicating with itself. Failure to
  communicate and collaborate can be deadly, as it
  can lead to crossed wires between departments,
  inefficiencies, and mistakes. Keep everyone up to
  date. Be open and honest as much as possible.
  That's how you achieve legacy modernization.

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6. Not including regulators in ensuring a
successful modernization process

• A successful banking modernization involves
  regulators in the decision-making process from
  the very beginning. This ensures a clear
  understanding of existing regulations that affect
  any modernization projects, the classes of data
  and systems affected, and the scope of any
  required change management and testing. Having
  regulations, rules, and policies clearly defined
  and communicated prevents any delays in project
  approval and allows for a smooth roll-out of the
  new systems in a way that is auditable and
  risk-aware.

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7. Misunderstanding the role of technology 

• There is only so much that technology can deliver
  on its own. Combined with the appropriate
  processes and policies, OBDX can be the backbone
  of a bank that uses risk-weighted data in every
  aspect of its decision-making and risk
  management. Technology has the disadvantage of
  needing to be well understood as a tool with
  clear functionality. Without the appropriate
  processes and policies to take advantage of
  technology, it does not provide a bank with a
  competitive advantage.

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8. Process redesign failures 

• The legacy redesign process can be fraught with
  problems. Banks need to adopt a new vision,
  mission, and strategy. If a bank has a sound
  vision, mission, and strategy, then the next step
  is to identify and adopt the design elements that
  will enable them to realize that strategy.
  Unfortunately, some banks still have poor
  strategies in their redesign plans. 

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Conclusion

• Legacy modernization and improving digital
  banking solutions is a challenge, with
  significant exposure to project risk and failure.
  While many factors influence the ultimate success
  rate of projects, one recurring theme from
  experience is the lack of a formal process for
  risk assessment and management before, during,
  and after the project.

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