Customer expectations drive back-office change
Banking technology and regulation are moving to create a real-time, cross-border environment. While this is possible in theory, dated and cumbersome back-office systems risk slowing the digital revolution, and leaving some institutions behind.
The use of out-of-date back-office software has been a problem for banks for some time, as aging systems have left them vulnerable to data breaches or system failures. But there is now an additional issue emerging as front-end technology risks demanding more of the back-office than it can deliver.
Jerry Norton, head of strategy at IT and business software outsourcing company CGI, says: “There’s a risk of it becoming a two-speed change, with front-office technology moving forward with services delivered by apps with 24-hour access, but with the back-office systems struggling to keep up, as new applications are added on top of legacy systems.”
Norton adds that the issue is threatening to hold back progress: “The banks can’t offer the full potential of what is actually possible through market and regulatory changes if their back-office is not up to it.”
For some, there has to be a specific need before change is made. Eugene Danilkis, CEO of software-as-a-service provider Mambu, says: “Banks are facing pain points from competitors, regulatory changes, customer expectation and dwindling profit margins to change.”
But this approach is creating the risk of having outdated systems which the next generation of bankers is not trained to use.