Digital transformation in financial services: The time is NOW, the question is HOW?
Barely a day goes by without fresh news about the urgent need for banks and other financial institutions to up their technology game. Whether it’s the threats posed by upstarts, new entrants, neobanks and big tech or the growing demands from customers for the latest whiz-bang experiences, or news about the latest tech meltdown at a large bank.
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The news is everywhere. Indeed, according to Capgemini, 95% of banking executives say that legacy systems and outdated core banking modules inhibit efforts to optimize data-centric and customer-centric growth strategies.
For established banks, the solution is obvious – just replace your costly, inflexible legacy systems with brand new, adaptable, flexible systems. Technology has the power to transform, indeed it has transformed entire industries so why not let it transform your bank? It’s an easy decision to make – very tempting. Little wonder that so many large banks have chosen this path over the years.
With history littered with examples of core replacement projects that ran over budget, under delivered or flat out failed, why is now the right time? What makes this time different? And perhaps more importantly how can banks engage in SUCCESSFUL digital transformation. Research from McKinsey shows that more than half of digital banking transformations exceed their initial timeline and budget – or fail. Indeed, according to their research 70% of transactions exceed their original budgets, and 7 percent end up costing more than double the initial projection. An immovable object?
If the case for change is rapidly becoming an irresistible force, are the impediments to change an immovable object?
