OPINION | Banks are changing fast. Their outdated systems aren't keeping up | Business

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OPINION | Banks are changing fast. Their outdated systems aren't keeping up

Each advance in services offering, such as when customers started to use ATMs, demanded a wider range of features. And for each of these features, banks had to add another layer of code onto the existing systems to ensure that these features worked.

Currently, new product launches under such systems can take 12 to 18 months to deploy, which is simply too slow for the fast-paced digital world. Furthermore, this complexity introduces a high risk of failure, is tied to expensive on-premises hardware, and has a high dependence on manual back-end processes. These come at a cost to support, are a hindrance to agility and impact the ability to respond to customer needs.

While the specific characteristics of Generation 2 systems may vary depending on the vendor or solution, they generally involve substantial configuration to adapt to client specific needs. They have superior technological capabilities and can keep up with the fast-paced digital world, taking products to market faster. A deep dive into the big business story of the week, as well as expert analysis of markets and trends.

They also increasingly use advanced technologies such as artificial intelligence to enable a superior customer experience. And while many of these next generation banks are yet to reach profitability, they are responding to customer demand faster and cheaper than the incumbents. This, coupled with potential changes to the payments entry criteria in South Africa, making the barriers to entry lower, is placing a real threat to organisations hamstrung by legacy banking systems.

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