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@Balázs,

You're absolutely right in the first of the top five challenges financial institutions are grappling with.

Legacy Systems eat more than 80% of the IT budget (which is not small) just for maintenance!

And the worst is that nowadays, with the new technologies and with a clever STP, you don't need those Legacy Systems anymore, reducing drastically the operational costs increasing the profits.

joao.bohner@gmail.com

@Alex, excellent work!

IMO what hinders and restrict the CX and UX design is that there is no backend architecture.

As Andrew Beatty mention in his Finextra Blog article:
The Tortoise and The Hare: Digital Banking Transformation

"The facts are that most Financial Institutions ecosystems are inclusive of varied solutions spanning a number of architectures and technologies and require varied skillsets to update, innovate and maintain."

There is an Architecture "Bank of the Future" (to be developed) to manage the financial transactions.

By this architecture, batch financial processes, silos, ETLs and DWs as well as their interfaces are simply eliminated, being replaced by a single knowledge source and by a single status update machine.

I am available to show it.

joao.bohner@gmail.com.br

@Craig,

The picture is completed.

As I can't upload pictures in the comments, pls send an email to do so.

@Craig,
wise comparison between the processes on a life of a butterfly and the activities on a financial process.
This comparison fits like a glove in the "Bank of the Future" platform Architecture, which handles all financial processes - not only payments.
Both are simple, direct and definitive.
The difference is that the butterfly dies and disappears and the history of financial processes is kept 'ad aeternum'.
I'm doing a butterfly evolution drawing, comparing it with the BotF Architecture.
joao.bohner@gmail.com

@Enrico,

The best definition of blockchain I've encountered so far.

Simple, clear and straight.

Congrats.

@Dharmesh,

Temenos still treat financial activities 'by business lines' rather than 'Corporately'.
Also Temenos still has Core Banking systems, rather than 100% online, realtime STP, for all financial activities.
joao.bohner@gmail.com

@Ammar,

your description of (some) requirements for the future scenario for Banks' modernization is absolutly correct!

About the solution:

"One solution is banks adopting core banking platforms that are already built on modern technology."

This type of 'ready-made' solution does not exist yet, and in order to achieve it a paradigm shift is necessary.

And the paradigm shift in the banking business to meet these requirements is to treat financial activities 'corporately' rather than treat them 'by business lines'.

This approach allows you to 'eliminate' the current legacy, along with its silos, DWs, ETLs among other batch systems, making banking business efficient, agile, flexible, substantially improving the user experience and, more importantly, drastically reducing operational costs.

@ Amy,

"The traditional banks would have to compete with the online banking services...".

The traditional banks must become "online banking services" providers, where a branch is just another option in the range of channels offered.

It should be noted that the term 'online' is not only applied in the customer side, but in the full completion of the transaction.

This implies real time updating of all compliances and regulations: Accounting, Central Bank, Treasury, Analytics, etc. eliminating the batch processes, silos and many DWs.

IMO and in my studies of the actual cases, this reduces operating costs by at least tenfold - not 10% - for a very well-organized bank, and in many cases, a reduction of thirty times.

Obviously, this drastic cost reduction and the agility to process in full and real-time STP, will enable significant improvements in financial transactions for both clients and information management.

@Elina,
so that the 'learning of the machines' can produce correct 'intelligence', it is necessary to provide correct 'school material'.
The correct 'school material' means Data, Things, Objects and Events correctly tagged and organized, which, surely, is not the case of the current situation in the Banks.
So, IMO, the first priority is to properly prepare the 'school supplies', by reshaping the data and processes in the back office, to then invest in ML &  AI.

It's a shame that, rather than reshaping the complex Architecture of today's financial processes, regulations are created to 'hide' complexity, increasing operational costs and creating more complexity.