Author: Kevin Phillips
Constraints of legacy back office platforms and its effect on digital banking
We keep hearing that large banks would love to deliver a seamless digital experience for their customers, but are constrained by their legacy back office platforms. These systems sit deep within the banking infrastructure in vaulted silos, rarely sharing information with each other and unable to present a unified real-time view of the customer. This architectural limitation is the key reason why banks say that a joined up, customer-centric view of the data cannot be delivered over an engaging mobile and online channel.
Is it a real reason not to deliver a seamless digital experience?
I get that the systems are soloed, of course they are, and there is nothing wrong with that, but this is no real excuse as to why a single and seamless digital experience cannot be delivered.
I’m not saying that it is a doddle to deliver, or that it would not be a challenging exercise to create, but it is not something that cannot be produced in a reasonably short period of time.
But it’s too expensive, I hear them cry. Then that is the reason. They don’t have the budget. It could cost millions. It would never get signed off.
Time to take a holistic view of digital banking channels
Okay, but hang on, we are hearing that big banks have multiples of millions, sometimes billions set aside to invest in their digital strategy, which only seems to deliver more funky customer apps and tablets-on-a-chain for the branches. Why not put all that money to good use, building bridges over the silos and creating a truly service orientated architecture that manages the master sources of data and exposes a holistic view for the digital channel to consume? Or, in other words, why not use all that money to solve the problem, not patch over the top with baubles and trinkets?
Legacy thinking – the culture and politics
The problem, I propose, is not one of silo systems, funding or capability. It might be one of culture, belief and politics. It might also be one of inertia, for while we hear every week from a start-up challenger bank, we are yet to see whether they are going to be a disruptive force or merely a new wave in banking.
For me then it could be more to do with legacy thinking than legacy platforms.
To test this theory, ask yourself, would your career be better served producing some eye-candy apps that go viral and have great feedback on the app stores and Twitter, or would writing some clever code that no one will ever see and doesn’t increase your NPS get you to the next step on your career path? In terms of just a barefaced ROI, splurging a multi-seven figure budget to get a single point uplift in customer satisfaction is going to send waves of positive energy up through the management hierarchy.
I have, of course, simplified the situation in order to make my point, however there is still an undeniable issue that is holding the big banks back. I judge that it is the legacy of solo thinking, not solo systems that is preventing a sea-change in digital banking.
My question is, do the banks really have very much time left to get this sorted before the new wave of start-ups actually do become the prophesied unstoppable disrupters of the market?