Bank IT: It just keeps getting harder
To cope with the demands of the future, bank IT departments have a lot of juggling to do.
Banks are under pressure to adopt new technology to modernize the customer experience and generate further operational efficiencies, all in the name of staying competitive. Many banks are investing in or acquiring fintechs to gain a technological edge. The banking customer is changing, too, increasingly demanding virtual and mobile options.
The big problem, though, is that most financial IT departments are still dealing with the same operational challenges from the past: budget constraints and short-handed staffs. There’s also the inescapable roadblock of legacy core systems that cost millions just to maintain, and millions more to upgrade. The number of public glitches by banks attributed to updates demonstrates the ongoing struggle of grafting new capabilities onto aging systems. Even when firms successfully complete upgrades, they sometimes have zero impact — Cognizant estimated that a quarter of core banking upgrades produce no transformative results.
The new architecture of microservices — designed to be modular and cloud-based — is being promoted as an operational alternative for banks. But it has numerous potential drawbacks, and some IT departments worry that it will be impossible for them to manage multiple cloud connections. A new survey of global chief information officers at financial firms by the application performance management software firm Dynatrace tracked widespread frustration and concern among executives.
There is, however, one emerging technology that banks are counting on to help them cut through their thicket of IT challenges: artificial intelligence.