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I just recently did a talk on application modernization for attendees from the financial services industry. The discussions we had afterwards were quite interesting and I enjoyed the sharing of ideas and potential solutions.
Interestingly enough, on my flight back home, I read an article in one of the biggest German newspapers. The title of this article was (more or less) “The next break-down is about to happen soon”. The content basically is all about digital transformation in the banking industry and how constantly evolving customer demand and expectation is the reason why these huge financial institutions are struggling to cope with these requirements. The root cause seems to be too many and over-aged applications in their IT landscape. The article mentions that an average (German) bank has about 1,200 (!) IT applications deployed and in production.
The pressure is also rising due to new disruptive business models. Financial start-ups build from the ground up to be customer centric rather than product and process centric as financial organizations tend to be today. These start-up companies can develop systems a lot faster with a high degree of agility because they have no legacy.
IT systems in the banking industry are much more efficient today compared to what they used to be a couple of years ago. However, this comes with the price of losing control of these systems.
As a matter of fact, financial institutions need to invest a lot of money in their respective IT infrastructure and application landscape.