Does your financial institution feel the need to migrate legacy system data? Here’s an alternative way on how to begin the modernisation journey.
Although an average financial services organisation is highly focused on customer needs, its legacy systems simply do not provide the flexibility to implement the quality experiences required to meet these needs. Instead, these systems represent a significant stumbling block on the road to modernisation, seamless omnichannel support, and overall customer satisfaction.
Of course, no organisation can simply pull the plug on existing infrastructure — least of all financial institutions, where customer data is high in both volume and importance. Instead, these organisations need to layer a modern solution on top of other systems, creating a simplified, improved front-end experience without having to migrate legacy system data or completely reinvent their processes. This helps unify existing systems and ultimately deliver an improved end user experience.
Here are a few key considerations for any financial institution considering legacy migration and one significant alternative, legacy system modernisation, with a client portal like Liferay’s Digital Experience Platform.
What Counts as a Legacy System?
Simply put, a legacy system is an outdated tech solution. It can be a piece of hardware, an entire software system, or just a single application — but it usually lacks the flexibility to meet today’s needs. Often, a legacy system is unable to interface with newer technologies, which means it can’t be integrated into a seamless omnichannel approach. It also creates legacy data silos, forcing both internal and external users to jump between multiple systems to get all the information needed for a single task.
Most financial organisations have at least one legacy application in their tech stack. This is because many institutions opened their doors before “digital-first” was an option, let alone an expectation. As such, these companies came to rely on whatever technology was available for core banking systems. This often includes:
- Back-end operations
- Transaction processing
- Account creation
- Digital customer interactions
While each old system was efficient and modern when originally implemented, they have since been left behind by more advanced technology and more flexible and efficient deployment options, like cloud computing. As these solutions become ever more accessible, affordable, and expected among customers, financial institutions naturally turn their attention toward updates. However, in addition to having many disparate legacy system structures, the organisations themselves often need to be modernised — which means legacy system migration is an option rendered both inefficient and highly complicated.
Pitfalls in Legacy System Migration
Like the legacy applications upon which it’s based, legacy system migration can often be inefficient and technically challenging. Here are a few common pitfalls that may make this an unproductive choice for financial institutions.
Cost
Many financial institutions delay digital transformation for budgetary reasons. Large-scale system migration of any kind can be costly in terms of the time and effort needed to complete each part of the process, especially with the number of silos involved. Perhaps more significantly, migration can also lead to a reduced return on investment and even loss of revenue while customers are forced to find inefficient workarounds during transitions.
Timing
Because migrating legacy systems is a significant undertaking, it’s often difficult to find the perfect time for such a project. No matter when a financial institution chooses to begin migrating, employees could face suspended tasks, inaccessible data, and interrupted workflows; similarly, many aspects of the customer experience will be rendered inefficient or impossible to access. Certain triggers — for example, the change in customer demand associated with COVID-19 — can lead an organisation to reconsider this timeline.
Unfortunately, waiting until the perfect time can create problems of its own - the longer a legacy system structure is in use, the more ingrained it is in the company’s approach and the more difficult it becomes to migrate.
Data Management
If legacy data migration was as easy as moving information from Point A to Point B, it would take no time at all. Unfortunately, that’s rarely — if ever — the case. A more realistic data migration process scenario often involves convoluted steps, multiple format changes, and even potential legacy data loss.
Customer Communication
A legacy system may be outdated, but if customers have been using it regularly, they might not see the benefits of switching to a more modern system. This is especially true if their financial institution fails to properly communicate the transition, which could lead to sudden and unexpected interruptions in service.
Effectiveness
Even with the budget, timing, and planning necessary for successful legacy system migration, there’s another issue to contend with - the effectiveness of migration overall. In truth, financial institutions often have underlying systemic issues (for example, having 15 logins for each client) that would only be perpetuated when transitioning to a new system.
Luckily for financial institutions, legacy migration is not the only approach to digital transformation. Instead, it’s possible to maintain legacy systems and unify them using a client portal, which turns disparate, siloed experiences into one streamlined touchpoint. This approach to the modernisation process comes with rich benefits, including improved efficiency, better customer service, and significant cost savings.
Benefits of a Client Portal in Legacy System Unification
Transitioning to a new system isn’t just expensive and time-consuming — it’s often unnecessary. That’s because a client portal can effectively sit on top of an existing legacy system or systems, allowing financial institutions to begin the modernisation process without reinventing their core processes.
Here are a few key benefits of using a client portal instead of pursuing legacy system migration.
1. Cloud Integration
Many financial organisations have preferred cloud providers or existing cloud strategies. Legacy system migration can sometimes impact the effectiveness of these solutions, forcing financial institutions to revisit their cloud architecture.
A client portal, on the other hand, can integrate with existing legacy systems and align with the preferred or existing cloud strategies. The portal becomes one piece in a far larger puzzle, allowing financial organisations to pursue modernisation on their own terms.
2. Data Security
Transitioning legacy data of any kind is a huge undertaking, especially when it comes to sensitive financial information. This data must be protected even during the migration process itself. Having a client portal will make it easier to unify and access this data safely.
Furthermore, a reliable cloud vendor can supplement and strengthen in-house security teams. The result is a reduced workload for a financial organisation’s IT department and increased customer loyalty, satisfaction, and confidence.
3. Agility
While other systems can demand a lot of time and effort, a client portal instead reduces the burden on internal teams. This allows a financial institution to be more agile in its approach, making changes without having to wait for IT experts and freeing up resources to create richer experiences for end users. The result is better, faster decision-making and reduced time to market.
Find Your Legacy System Solution Today
If a legacy system is keeping your financial organisation from achieving all the benefits associated with modernisation, don’t feel pressured to jump straight to legacy system migration; instead, consider a client portal. All you need to get started is an effective application like Liferay’s Digital Experience Platform.
To start envisioning the modernisation process in your organisation, take the first step by requesting a platform demo today.
