As some of the earliest adopters of business computing, many financial services companies now face a host of issues with their decades-old legacy mainframe and distributed database environments. This makes it difficult to remain compliant with regulations and react to more nimble new entrants to the market.
Banks, brokerages and insurance companies are some of the most long-established, venerable pillars of the business world. But the very deep-rooted nature of these financial services companies could be their Achilles’ heel. Why? Those same companies can’t seem to move on from the technologies that made them leaders in decades past, despite the fact that maintaining this legacy technology causes a number of risks and concerns.
Legacy databases often lack modern security features, making them vulnerable to cyber-attacks and disastrous data breaches. Designed decades ago, these environments are not built to withstand current threats, leaving critical financial and customer information at risk. These challenges include:
These issues can also lead to impaired compliance with industry standards and even governmental regulations.
Financial services companies also face significant challenges maintaining resources to support and maintain their outdated environments. As technology evolves to a cloud services architecture, finding skilled personnel with expertise in maintaining legacy mainframe and distributed database systems is becoming harder (and more expensive!) every day. Mainframe systems in particular have been passed down from generation to generation with diminishing understanding of the inner workings of the technology over time.
Up-and-coming support staffers aren't interested in learning these outdated technologies—and schools aren’t teaching them anymore. With every passing month the knowledge required to manage and troubleshoot older technologies becomes scarcer, just as existing resources are looking towards retirement.
Another hurdle created by legacy technology: Often financial organizations have multiple legacy databases that have never been integrated. This creates hazardous data silos, where crucial information is scattered across various systems, making it impossible for leadership to gain holistic, organization-wide information, which causes delayed or under-informed decision-making.
Alongside profitability, compliance is a vital objective for financial services leaders and proper tools are needed to support it. Why? Because failure to meet strict regulations and reporting requirements can result in severe financial penalties, ugly publicity and long-lasting reputational damage.
Another worry for many FinServ organizations? After decades, many legacy database vendors have now stopped, or plan to stop, providing software updates and support. This leaves financial services companies that are dependent on this technology scrambling to ensure their systems will be protected from security breaches and maintenance gaps that can lead to compliance violations and stiff penalties.
What’s your plan for replacing outdated mainframe and database technology? Migrating to new technology can take years from start to finish and most financial services companies are already at some stage of modernization. However, many have been delayed or blocked from fulfilling their original plan. Meanwhile, business continues on at a rapid pace and migrations, if not properly prioritized and addressed, can feel like the proverbial plane undergoing maintenance in-flight.
To overcome these challenges and accelerate modernization, increasingly financial services companies are opting to modernize their legacy environments and migrate to cloud systems that offer enhanced security features, better data management capabilities and improved reporting and auditing. In particular, migrating to the cloud empowers financial services organizations to better serve their customers, innovate on demand, become more efficient and capitalize on emerging opportunities.
However, to be successful and seamless, cloud migrations require comprehensive analysis of the company’s unique technology, security and data privacy concerns. Because of their critical business and regulatory mandates, financial services organizations must approach such modernizations strategically.
An experienced migration partner can:
mLogica’s expert teams have helped successfully migrate leading financial services organizations worldwide to the cloud with our automated migration software (Case Studies).
For an in-depth understanding of mLogica’s modernization capabilities, reach out to our mLogica migration team at directly.