The greaT ShifT in Banking: legacy To cuTTing-edge SySTeMS

Replacing legacy systems with modern systems has always posed a huge challenge for banks. While the benefits of using modern systems are selfexplanatory, they often shy away from the transition because of the complexity involved in the migration

The banking sector has often seen trends emerge that significantly changed the way banks functioned. However, no change has been as notable as the ones that are being fuelled by the digital revolution of recent times.

The last two decades saw banks in India embracing technology to improve the efficiency of their services and processes. The arrival of Internet banking and subsequently mobile banking extended a bank’s services beyond its premises. These changes forever – altered the way customers interacted with a bank and subsequently changed expectations of how they’d like to interact with banks in the future.

Eventually, banking activities transcended their traditional scope with the arrival of new models like crowd funding, peer-to-peer lending and mobile- only banking amongst others. The sector was also rapidly moving towards adopting a neo banking model that would forever change the way people bank.

The ‘Legacy’ Challenge

Change has always been closely associated with the challenges involved in making the transition. Replacing legacy systems with modern systems has always posed a huge challenge for banks. While the benefits of using modern systems are self-explanatory, they often shy away from the transition because of the complexity involved in the migration. Core banking transformations often involve multi-year and multi-phase activities that are costly and effort intensive. Since banks are expected to provide their services 24x7, migration of core banking systems would also impact service to customers and internal stakeholders due to the temporary unavailability of systems. There has also been an increase in the number