The development of COBOL (Common Business-Oriented Language) marked a significant milestone in the evolution of financial services technology. Despite being over 60 years old, about 40% of banks globally still rely on COBOL for their core banking systems as of the early 2020s. While COBOL’s durability showcases its adaptability, it also underscores the substantial challenges organizations face when transitioning from legacy technologies to embrace new, transformative solutions.
The Challenge of Legacy Technologies and the Potential of New Tech
Research from AWS and Tata Consultancy Services has shown that 70% of Chief Experience Officers consider legacy modernization a strategic business priority. By modernizing their systems, financial services companies not only benefit from enhanced security and reduced operating costs but also achieve greater agility and efficiency. At TeKnowledge, we understand that outdated, compartmentalized IT architectures can significantly stifle innovation, hampering collaboration across teams and the ability to respond to cultural shifts and customer demands.
For instance, as banks increasingly shift towards customer-centric experiences and self-service operations, the need for sophisticated, detailed data collection and analytics becomes critical. Legacy systems often lack the capability to effectively gather and utilize such data, which is essential for adapting to and anticipating customer preferences.
Modern technology infrastructures are ideally suited for integrating with new technologies and scaling up to match enterprise growth, thereby enabling businesses to adapt and innovate effectively.
The Challenges of Migration
In the last decade, many businesses have transitioned to cloud computing. Research from McKinsey has demonstrated that the impact of cloud technology on innovation and optimization has generated over $1 trillion in value for Fortune 500 companies. However, the migration from legacy systems to the cloud represents a significant investment of time and resources for enterprises. According to the Society for Information Management, this migration is one of the top ten largest investments for organizations, and further McKinsey research indicates that 70% of digital transformations exceed their original budgets, with 7% costing more than double their initial projections.
TeKnowledge’s Strategic Solutions for Your Organization
There is no straightforward shortcut to effective digital transformation or to moving away from legacy systems; the benefits, however, significantly impact the business’s bottom line. Research from McKinsey shows that top economic performers allocate a greater share of their digital-tech spending on building new digital businesses.
While there are no easy paths, partnering with TeKnowledge offers a formidable solution. We understand the challenges of legacy systems and excel in managing digital transformations to maximize the benefits of cutting-edge technology for your business.
Connect with TeKnowledge today to learn how we can enhance your digital transformation by improving your customer experience with our outsourced support teams and using technology to identify growth opportunities for your business. We can also ensure you have the necessary tech talent pool to support this migration and enhance your digital services.
