The creation of the COBOL programming language was a major event in the financial services industry, and it still underpins much of the software used in the industry worldwide. In 2019, COBOL turned 60 years old, yet, in the early 2020s, 40% of banks were still using COBOL programming languages as the core for many of their banking systems and technologies. While COBOL’s resilience has proven its adaptability, it also demonstrates the challenges that all sectors face when migrating from legacy technologies to successfully embrace new ones.
The challenge of legacy technologies and potential of new tech
Research from AWS and Tata Consultancy Services has shown that 70% of Chief Experience Officers believe legacy modernization is a strategic business priority. In modernizing system technology, financial services companies not only benefit from better security and reduced operating costs, but enhanced agility and efficiency. Across all sectors, siloed, complex and outdated IT architecture can inhibit innovation by stifling collaboration across teams and the ability to respond to cultural shifts and customer demands.
For example, banks have seen a significant shift to customer-centric experiences and self-service operations. Businesses using legacy systems will not have the right sort of detailed data collection and analytics to help tailor their evolution to more customer experiences in line with their customers’ habits and preferences.
Modern tech infrastructure is also better suited to integrating with new technologies and expanding to match enterprise growth.
The challenges of migration
Over the last decade, scores of businesses have been migrating to the cloud. Research from McKinsey has shown that cloud technology’s impact on innovation and optimization has generated more than $1 trillion for Fortune 500 companies.
However, transferring to the cloud and other migrations from legacy systems is a significant investment of time and resources for enterprises. According to research from the Society for Information Management, it is one of the top 10 largest investments for organizations,
Another McKinsey study shows that challenges in updating legacy systems alongside issues resourcing tech talent are a significant factor in why 70% of digital transformations exceed their original budgets and 7% end up costing more than double their initial projection.
The solution for your organization
There is no shortcut to an effective digital transformation or alternative to the need to leave legacy systems behind. After all, benefits have a real impact on the business’s bottom line. Research from McKinsey shows that top economic performers report a greater share of digital-tech spending on building new digital businesses.
While there is no shortcut, at Tek Experts, our suite of services is the next best thing. We know the challenges of legacy systems, and we know how to successfully manage digital transformation to ensure your business is making the most of the possibilities of cutting-edge technology.
Speak to a member of our team today and learn more about how we can help your digital transformation by improving your customer experience with our outsourced support teams and using technology to identify growth opportunities for your business. We can also ensure you have the pool of tech talent to support this migration and your digital services.