Misguided loyalty

If you want loyalty, get a Labrador as a South African banker once told me. Yet, bankers are surprisingly loyal to one thing – their legacy systems.

Often, when replacing legacy payment systems, banks just ask for exactly the same as they already have – without looking at the costs savings and opportunities change could bring. The analogy is like buying a Lamborghini – but insisting on having the same handling as your old Trabant.

Key areas that seem to generate the most loyalty are reporting and ATM functions.

With the opportunity to improve the efficiency of the whole enterprise, at the same time being more green and making some polar bears lives more comfortable, you would think that banks would jump at the chance. Invariably, however, I am given a list of reports that are produced today and told – we want these. In fairness, these reports and the associated business processes have grown over decades of use, and there must be the wisdom of many very experienced people embedded in them, however, I cannot feel that this is the way they want to continue in decades to come.

Another area is ATM screens and functions. The opportunity to revamp screens and flow to customers would seem like a gift, but invariably, we are told we just want what we have today. ATM functions are not always a success, that brilliant idea in the 1990s that the bank implemented, now only has four users a month, does it really justify the cost of testing, maintenance and updates for the next twenty years?

This is not a phenomenon unique to banking and ATMs. Invariably, multi-million legacy replacement systems are cost justified on ‘efficiencies’. In many cases significant benefits can be gained by reviewing processes and procedures.

Do you really want to drive that new Lamborghini down a dirt track for the next twenty years, or an empty three lane highway? Without the willingness to change the whole environment the total benefits of significant legacy system replacement will never be realised.