Why it's time the finance sector ditched its legacy infrastructure
Are you still running legacy infrastructure simply because it continues to work, not because it's the best way to do business today?
Ever known someone who insisted on driving a beaten-up old car until it pretty much fell apart?
You know the sort: as long as it works, they'd argue, why scrap it? Some finance organisations are doing something similar: running their middle and back office processes on legacy infrastructure simply because it continues to work, not because it's the best way to do business today. And according to market researcher McKinsey, many of the finance sector's processes out back are still based on people (whisper it quietly) processing paper.
But even if many banks, brokers and investment funds are still running legacy infrastructure, and are not yet realising the cost, performance, connectivity, availability and business advantages of digital transformation in the cloud, the recent revelations over the Meltdown and Spectre vulnerabilities should give them pause.
The reason? More than anything, the risks of not maintaining the latest code and security patches on legacy platforms, which could give attackers ways to read encryption keys and passwords, show a pressing need for finance firms to adopt modern, securable digital infrastructures. Nobody will be making reliable security patches for an obsolete code base - and remember that in this, the year of the GDPR (with heavy fines coming in for data losses) most data breaches have been caused by old, unpatched servers.
What is stopping finance firms building a flexible, cloud based, secure digital infrastructure? Not knowing where to start, perhaps. The hot new 'fintech' packages that can help deliver some of the cloud's advantages might be seen as risky by some - and so perhaps likely to tangle the firm up in regulatory red tape. But an upgrade does not have to involve bleeding-edge technology: some of the tried and trusted systems that finance firms could upgrade to are still many years younger than their creaking legacy platforms.
The fact is, the advantages of fully-managed, hosted finance applications in always-on, secure cloud data centres, are pretty profound. They let firms create cost effective, optimised and high-performance services - bringing to the middle and back office some of the innovations that the banks have brought to their customer-facing front ends - with applications like online banking and mobile banking apps.
Innovation and partnership
We are helping finance firms make a move to such technological infrastructure in a way that is simplifying the transformation and taking the pressure off their own teams. As seasoned experts in cloud hosting technology, we are helping them choose the best mix of locations - what balance of public and private cloud, say - best fits their application needs.
And working with an abundance of expert partners, we have been ensuring finance-sector applications fly. For instance, BT Radianz partner Cobalt leverages innovative distributed ledger-based technology in a private network to help our clients remove cost and complexity from post-trade FX processing - winning it awards for its efficiency and deduplication of that aforementioned paper-based effort. We couldn't agree more with Cobalt's stated stance: "Legacy infrastructure is duplicative, inefficient and unfit for today's market."
With security risks still the top threat facing the finance sector, we are ensuring cloud solutions deliver the security response and defences that finance firms really need for business stability. The ability of data centres to be patched in one go, and quickly, rather than piecemeal in legacy servers’ setups, is one enormous and often understated cybersecurity benefit.
It's getting to the point where it would verge on negligence not to grasp the cloud's advantages: digital transformation is a step that finance firms must make if they are to remain agile, competitive and have strong security on tap.
If they don't, they risk looking like that beaten up old car that's being driven until it drops - an unedifying spectacle, for sure, and one that will do little to engender credibility.