Innovation held back
Legacy IT systems ‘exposing financial firms to greater risks’
Scott McGlinchey: need to reduce risks
Financial services firms could cut their IT operational costs by up to half and create more secure systems by moving their data and applications to the cloud, according to new research.
A staggering 92 of the top 100 financial institutions still rely on old, slow and insecure IT mainframes which are soaking up billions of pounds that could be invested in more cost-efficient systems.
Edinburgh-based digital solutions company Exception has published a report which highlights the problems of existing legacy systems and claims this is holding back their ability to innovate and reduce their exposure to risk.
It builds on another study by McKinsey & Company which found that many financial firms invest up to 9.4% of their operating income on technology, with 73% wasted on maintenance of legacy systems. It highlighted an example of a financial services company with seven payment systems and 20 custom-built applications.
McKinsey revealed that digital transformation offers vast potential to financial firms: up to 90% of banks’ workloads could be hosted globally on the public cloud or software as a service in a decade.
Exception CEO, Scott McGlinchey, said: “This new world creates significant pressures for companies which include reducing the risks of increasing and more complex cyber attacks, the need to diversify with fintech solutions, and the capability to compete with rival challenger brands.”