It’s well known that financial institutions are under a lot
of pressure to replace their core legacy systems, and here at ArtinSoft we’ve seen an increased interest
from this industry towards our migration services and products, specially our Visual Basic Upgrade
Companion tool and our VB to
.NET upgrade services. In fact,
during the last year or so we’ve helped lots of these institutions move their
business critical applications to newer platforms, accounting for millions of
lines of code successfully migrated at low risk, cost and time.
Margin pressures and shrinking IT budgets have always been a
considerable factor for this sector, with financial institutions constantly
looking for a way to produce more with less. Some studies show that most of
them allocate around 80% of their budgets maintaining their current IT
infrastructure, much of which comprised by legacy applications.
Competition has also acted as another driver for legacy
modernization, with organizations actively looking for a competitive advantage
in a globalized world. Legacy applications, like other intangible assets, are
hard to emulate by competitors, so they represent key differentiators and a source
of competitive advantage. Typically, significant investments in intellectual
capital have been implanted in the legacy systems over the years (information
about services, customers, operations, processes, etc.), constituting the
back-bone of many companies.
In the past, they approached modernization in an incremental
way, but recent compliance and security developments have drastically impacted
financial institutions. In order to comply with new regulations, they are
forced to quickly upgrade their valuable legacy
software assets. Industry analysts estimate that between 20-30% of a bank's
base budget is spent on compliance demands, so they are urgently seeking for
ways to reduce this cost so that they can invest in more strategic projects.
However, many institutions manually rewrite their legacy
applications, a disruptive method that consumes a lot of resources, and normally
causes loss of business knowledge embedded in these systems. Hence the pain and
mixed results that Bank Technology News’ Editor in Chief, Holly Sraeel,
describes on her article “From
Pain to Gain With Core Banking Swap Outs”. “Most players concede that such
a move (core banking replacement) is desirable and considered more strategic
today than in years past. So why don’t more banks take up the cause? It’s still
a painful—and expensive—process, with no guarantees”, she notes. “The
replacement of such a system (…) represents the most complex, risky and
expensive IT project an institution can undertake. Still, the payoff can far
exceed the risks associated with replacement projects, particularly if one
factors in the greater efficiency, access to information and ability to add
applications.”
That’s when the concept of a proven automated legacy
migration solution emerges as the most viable and cost-effective path towards
compliance, preserving the business knowledge present in these assets, enhancing
their functionality afterwards, and avoiding the technological obsolescence
dead-end trap. Even more when this is no longer optional due to today’s tighter
regulations. As Logica’s William Morgan clearly states on the interview
I mentioned on my previous post,
“compliance regimes in Financial Services can often dictate it an unacceptable
operational risk to run critical applications on unsupported software”.
“These applications are becoming a real risk and some are
increasingly costly to maintain. Regulators are uncomfortable about
unsupported critical applications. Migrating into the .NET platform, either to VB.NET
or C# contains the issue. Clients are keen to move to new technologies in the
simplest and most cost effective way so that their teams can quickly focus on
developments in newer technologies and build teams with up to date skills”, he
ads, referring specifically to VB6 to .NET migrations.
So, as I mentioned before, ArtinSoft has a lot of experience in large
scale critical migration projects, and in the last year we’ve provided
compliance relief for the financial sector. With advanced automated migration
tools you can license, or expert consulting services and a growing partner
network through which you can outsource the whole project on a fixed time and
cost basis, we can definitely help you move your core systems to the latest
platforms.