Mostly all US/Canadian banks are carrying on decentralized, automated banking system of multiple IT applications and that also some 20 year old technologies. They have ‘home-made’ applications for back-office productions systems and huge IT department to maintain that applications.
Catch-22
The banks are in catch-22 situation. One side is high costs of old customized application maintenance. Other side is rusted market which stopping them to invest money for centralize and optimize its business processes.
Trend from now – 3 years
There is emergent trend popping up in financial institutions to centralize their decentralized old banking system of IT applications. This is pushing these banks into industry-specific standard software. More banks are purchasing standard SO (Service Orientated) based software systems, then ‘home-made’ systems.
This working trend of core banking renovation is driven by the reduction of the high cost of ‘home-made’ application maintenance and the commoditized functionality banking back-office operations. That is driven by 2009 financial meltdown.
Next Steps
As every bank knows that their prevailing systems were obstructing their ability to achieve tactical objective of consolidating its local as well as international presence. It’s in hand of their management to decide that this goal can be achieve with a banking system that could effectively evolution their decentralized systems into a single integrated platform. They have to decide quickly because before going out for shopping they have to renovate there business processes and that take lots of efforts and time may be 2 - 4 years.
Like your thoughts. Couldn't agree more that centralizing system is a huge venture with massive re-engineering which if not carefully planned, fails miserably.
ReplyDeletecorrect your spelling of catch Kaushik
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