Today, customers want banking and insurance services at their fingertips. Literally. They’re mobile, savvy, connected and knowledgeable, and financial institutions need to ensure that they match their customers’ needs—and swiftly, or else their competition will.
While past imperatives for success included low-cost solutions, efficiency and service level agreement compliance, today’s success currency is speed, agility, rate-of-innovation and best-in-class talent. Financial institutions that want to succeed have to transition to the new rules of the game and, in doing so, need to become better at running, managing and changing or transforming their business models.
Financial institutions need to focus on achieving operational excellence, while driving efficiency to reduce costs. In IT terms this means vendor consolidation, agile implementation, and rationalizing their application portfolio. Moreover, in an ever-changing regulatory environment and to avoid penalties, companies must focus on risk and compliance activities. This means companies have to ensure fraud and risk analysis and invest in technologies that will keep them on the right side of the law.
The good news is that many banks and insurance companies (as surveyed by the Everest Group) have made headway in running and managing their companies more efficiently. Embarking on transformational activities through newer channels and disruptive business models will drive growth. These technology initiatives include mobile, big data and analytics, and cloud among others.
While most financial institutions agree that digital transformation makes great business sense, (and concede there is a strong correlation between digital investments and business performance), many companies admit their technology is just not set up to embrace digital or use it effectively. This is where companies should turn to application modernization; the first step toward embarking on a digital transformation journey. Application modernization offers other benefits—including cost savings, efficiency and, more important, a simpler, cleaner IT, enabling institutions to become future ready.
To be clear, application modernization does not mean radically changing enterprise architecture and IT; in addition, it does not require huge investments. It simply starts with evaluating and rationalizing existing infrastructure and applications and then embarking on a strategic modernization roadmap, which will yield insights into what to re-architect, re-host, retire, replace, upgrade or migrate.
Among the many application modernization initiatives, companies often choose to re-host and/or re-architect their applications. While application re-hosting helps companies transport their applications to modern and more agile platforms without making any changes to functionality, re-architecture goes a step further into the application and data layer, tempering it with modern features, such as agility, flexibility and the ability to take advantage of newer technologies.
In our experience working with global financial companies, we have helped top stock exchanges of the world, including NYSE, NASDAQ, and Singapore Exchange modernize their mission-critical applications. Apart from streamlining its operations and gaining efficiency, Singapore Exchange today has an IT infrastructure that is better aligned with its future business initiatives. Dell also helped a global credit card company integrate with contemporary platforms through re-hosting services—helping the company get its product to the market faster.
Know more. Register to watch the webinar Application Modernization Services in Banking and Finance Industry, when I'll be joined by Jimit Arora, Vice President, IT Services Research (New York), Everest Group to talk about how financial institutions need to focus on a triple mandate of run, manage, and change to ensure operational excellence, reduce costs and drive efficiency and help them adopt newer channels of digital transformation to drive growth.
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