Around three quarters of European banks are using outdated core systems, affecting their ability to innovate and accelerate growth, according to a survey commissioned by vendor Infosys.
Yup! This is not really news as its been long known that Banks struggle to replace legacy systems. The personal risks of procurement and protectionism are massive barriers to investment. There is a lack of knowledge at a business level of IT that generally
lets internal IT hold the wheel and obviously steer direction towards internal developments. A survey on the success of internal IT developments would be more enlightening but who would come clean on that?
Bang on the money as usual Gary.
It looks like many firms (regardless of name, brand & Tier) are now paying the price for short-cuts & system bolt-on's accumulated over the years via buy-outs etc. I can think of one immediately who have a myriad of systems for various asset-classes which
means it's a nightmare to consolidate multi-class reporting ++ which triggers so much manual workaround externally plus, seriously inhibits STP opportunities & Ops-efficiencies in the PT space..
Chickens & roost are the words that come to mind, chuckle, bon w/end
The CISI are planing a lunch time briefing on this subject and trying to get a FS firm to front up. Thats not an easy thing to do as this topic is far to controversal and scary for FS firms to admitt there short comings and now the growing legacy risks that
will hinder badly their regulatory and future business capability. Boards should be made accountable but it will never happen
Dear Sirs, It is true that banks have outdated core systems. This is due to an informed decision by said bank boards to follow the Goldman Sachs yardstick for positive shareholder value: Mimimize IT and staff spend and get rewarded by the analysts that rate
you as top notch in efficiency! Therefore the non-investment and the outsourcing to third world countries. Another consequence however is the decreacing capacity to service customer needs, but investors care little what happens after the upcoming quarterly
report - they worry about that only if they still hold the shares in question. And then the prescription is more of the Goldman Sachs medicine!
© Finextra Research 2014