As an IT leader in the financial services industry, you may feel like you’re constantly engaged in a tug of war.
The business is pulling you in the direction of moving faster and being more agile, so that new customer offerings and pricing can be introduced with unprecedented speed. In fact, the new standard you’re being asked to meet is the delivery of real-time, dynamically priced and highly- personalized product offers, available to the market as soon as they can be conceived of and approved.
In your own shop, legacy applications hold you back from moving as quickly as you’d like, and competitive challenges simply can’t be met with the technology stack you have in place. Even if you’ve undergone modernization efforts within the last few years, and you’ve employed new functionality, your in-house/on-premises (on-prem) architecture lacks the agility you need.
To add to these pressures, the lure of new technologies and architectures is almost irresistible – being termed “cloud-native”, “cloud-based”, “SaaS”, “composable”, “containerized”. You know that your scarce staff doesn’t have time to do a thorough evaluation, and the speed and flexibility of these environments often seem too good to be true.
So perhaps it’s actually less a tug of war than a four-way pull. Let’s see how you can overcome those opposing forces.
Time to Face Facts with Insurance & Banking Legacy Systems
Let’s face it, several of the pressures we just recapped aren’t going to dissipate any time soon:
- The financial services world is getting more competitive, not less, and demands for launching and supporting new products and services is increasing, not decreasing
- The need for a robust and well-protected infrastructure is never-ending
- Legacy applications are becoming more and more difficult to maintain, and their functionality is lacking. Even well-established technology suppliers such as Jack Henry & Associates acknowledge that it’s “game over” for legacy systems, and that new architectures and technology are required to succeed
- Staffing and skills shortages are real and permanent
Against this backdrop, your salvation lies in turning that fourth force, new technology, from tantalizing to implemented, and quickly.
If you’re like many financial services IT leaders, it’s the uncertainty involved that’s holding you back. Let’s look at some of the most common concerns about moving to the new world, and perhaps allay those fears.
Fear of Being First
We can’t all be pioneers or early adopters. For some, waiting for technology to be proven is the better strategy. Well, we’re at that point.
While cloud and SaaS technologies were first adopted by aggressive technology suppliers and technology consumers, they are now proven and widely-deployed. In financial services, well established incumbents have successfully pivoted to leverage such technologies, giving them a competitive advantage while helping make them the new industry standard.
The Role of Data
Let’s take a closer look at the data chaos that exists in some businesses. The data is likely stored in silos across multiple internal systems, and when that data is needed to meet customers’ needs – crafting a new insurance policy with real-time pricing, or initiating a mortgage, for example – it’s difficult to know which data is relevant and current. Handoffs across the organization and between systems invite confusion, lost data, and worst of all, poor customer experiences (CX), and lost business.
In just one example among many, Earnix client, insurer Hollard consolidated seven insurance rating engines and replaced them with Earnix, in order to overcome the data challenges they were facing, and to provide better customer service through improved rating and pricing processes.
Lack of Skilled Resources
The longer you attempt to maintain that legacy environment, and the silos they contain, the more severe your staffing shortages will be.
Staffers hungry for new experiences will leave for more modern environments, where they can grow and use skills that will ensure their futures – perhaps those of your competitors, or the forward-looking technology suppliers you should be working with.
Your best performers want to work in a cloud-native/SaaS environment, utilizing such leading-edge technologies that leverage the most advanced AI and ML capabilities, intelligent operations and composable and dynamic infrastructures.
They are flocking to training resources such as Earnix Academy, Udemy, Coursera, and myriad others to improve their skills and employment prospects. You won’t be able to hold onto these top performers by assigning them maintenance programming on your legacy systems. For those you don’t lose through “brain drain”, the experts in your legacy technologies may stay but will fail to achieve their full strategic potential.
Maintaining a legacy environment is sticking your finger in the dike, attempting to hold back the flood of modernization. It’s untenable in the long term. Giving your team a chance to break down silos and work with new technologies and new vendors is a sure-fire way to retain the best and brightest.
Never has it been more relevant for insurers and banks to transition from lofty legacy systems to dynamic, composable and intelligent operations. Innovation is front and center, as new opportunities for personalization and improved customer experience are proving immense value. Delaying the transition away from legacy systems is delaying the agility and speed needed to meet growing customer demands and your business objectives. Now’s the time to act.