New era businesses outpace legacy businesses at grander scale and speed, resulting in lower costs, faster delivery, and more significant technology usage. Traditional risk assessment approaches are too slow, too siloed, and unscalable to accommodate digital business deliverables.
The Banking industry is still one of the business fields that still relies heavily on old core systems. In the ’60s and ’70s, banks were the early-adopters of platforms that enabled them to report, centralize information about their clients, and access files. The most common programming language available was COBOL – it was created in 1959.
Here is the problem: since then, banks started to add business capabilities on top of these systems. Processes were developed to cope with the available mechanisms, and from that point forward, the whole operation relied on it. COBOL was undeniably the state-of-the-art technology to use when
The Beatles were still touring around the world, but more agile platforms appeared since then. The industry seemed to ignore or be unaware of this until new and swift competitors started appearing with better user experience and customer support, and seamless control over assets.
Revolut, for instance, is a fine example of where this happened. Ever since the business was found in 2015, the London-based fintech scaled its operation worldwide while promising customers better and additional services, account tracking, and the ability to trade currencies at a minimal cost. Fast forward to today, the more than 12 million users are now able to trade cryptocurrencies and stock over a mobile app.
The laggards will struggle to keep their systems operating and continuously lag if nothing is done. They can always keep up with their old weapons, but the implementation speed is far slower due to their legacy systems. But even if the new players have the technology upper hand, they must follow a continuous innovation approach and adopt new technologies. Otherwise, the path taken will be identical to that of incumbent banks.