STRATEGIC SURVEILLANCE
STRATEGIC SURVEILLANCE
How financial services are accelerating core modernisation : Driven by costs , integration and executive support , with cloud playing a key role
or organisations in a variety of industries , Digital
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Transformation means modernising core systems . It ’ s certainly , true for financial services firms .
A large majority of companies in the industry ( 80 %) have begun core modernisation efforts , according to an online survey of 100 IT and business executives at US-based financial services firms conducted in September 2021 by IDG .
The number one reason firms are modernising core systems is that the cost of ongoing ownership is getting too high . Firms are prioritising which core systems should be extended , renewed with modern independent software vendor solutions or reinvented entirely to address emerging and ongoing Digital Transformation .
While it ’ s not surprising that many financial services firms are modernising core systems , the timeframe in which they are accomplishing this is noteworthy . Organisations surveyed said they will modernise incrementally , with each incremental change to a given core system expected to take 18 months on average .
Drivers for modernisation
impact business processes and trigger a modernisation initiative .
Also scoring high : the need to integrate with third-party partners such as retailer services ; an executive in the specific business line is championing the initiative ; and the existing core system is not responsive enough to meet business or customer needs .
More than half of the firms surveyed – 54 % – reported that executive support is one of the key drivers for modernisation . IT executives including the CIO , CTO , or other top technology leaders are the most likely champions of core modernisation efforts at financial services firms , cited by 69 % of the respondents . They are followed by executive management ( 44 %) and chief data officers ( 44 %). �
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Skyrocketing expense are one reason for this rapid time frame relative to core system efforts of the past . When asked to list the top five drivers for modernising their core systems , survey respondents put the rising cost of ownership at number one .
Other drivers for modernisation include the fact that systems need to be integrated more quickly and securely with digital native financial services , and the emergence of business process changes that impact the core system that supports those business processes . For example , changes to tax requirements , evolving governance mandates , or even the need to support remote workers can
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