The question is can your cobbled-together, patched up legacy systems meet the demands of the modern world – and keep up with the smart technology on my phone?

The brutal truth is that banking has done a great job of keeping up with digital, despite the patchwork of mainframe databases, bespoke applications, and third party external packages in place, all kept in check with some middleware. And, it has to; as jettisoning it all and starting over is simply too expensive and disruptive.

That’s in core banking. It’s the same situation in marketing. Different digital channels are operating as separate, silos of information and incompatible customer data sources are made to look as if they all cohere and interoperate. That’s at both the systems and operational level; one team looks after social, another after mobile, another is tasked with monitoring online.

Stop thinking silo

Clearly, the omni and cross-channel delivery banks want to achieve is being constantly undermined by this legacy.

Integration platforms such as Axway can work well, but without the flexibility that a core modern digital platform can provide, banks are still restricted in what they can achieve. No wonder 48% of bankers contacted by integration firm Talend in September 2015 report that the legacy issue is their biggest challenge – one preventing them from realising the potential benefits of big data (http://www.itproportal.com/2015/10/21/legacy-it-systems-holding-back-uk-banks/), let alone omni-channel.

Banks face a real risk of omni-channel meltdown.

There are good reasons why this has happened, of course. Financial products are normally ‘long tailed’, with terms and conditions that mean they tend to require their own dedicated systems, and are not easily incorporated in to general systems. As a result, system consolidation is harder to achieve than in manufacturing or logistics, say. Those firms can solve their siloed systems problems by consolidating onto a SAP or an Oracle ERP – a move made far easier by not having to cater for products that are both complex and have lots of heritage to be managed.

But at least, can we not start to unpick the culture that’s built up as a result of this division at the back end – the silo culture? It’s critical banks grasp the mettle and make the technology and systems changes necessary.

One day, those legacy systems will have to go

To meet that challenge, banks need to focus on the customer experience. Why? Because working backwards from there will help them plan for the legacy IT issue.

Next, they need to think incremental change, not Big Bang! They should implement a promising technology in a small way, modify it and extend it using agile techniques for rapid iteration.

Exploit the Cloud to its limit, using its inherent flexibility to pilot good ideas to see if they work and expanding on them where they look helpful. If you haven’t got a digital front end, build one as quickly as you can as the business case for that is a no-brainer, cutting customer service cost by encouraging self-service being the biggest payback.

These are all things good bank IT departments can and should be doing now. And it will help.

But there is a showdown coming. There will come a tipping point where the cost of papering over the cracks and creating workarounds will create risk greater than the cost of a rebuild. Risk will eventually mean your core systems break down and you get a €100 million fine from the regulator.

Keep iterating and moving forward at your own pace until that day.

But do keep moving forward – as an omni-channel banking proposition that doesn’t work as well as the customer’s iPhone is not an app they’re going to want to download from your ‘store’.