5 Ways to Tackle the Threat of a Legacy Banking System

Dane White August 19, 2021 Banking

Digital Transformation Banking

Legacy banking systems have an impressive 60-year foothold that’s losing its grip with the modern customer — and opening a great opportunity for innovation.

Traditional banking mainframe programmers of yesteryear never considered “space age” marvels like smartphones and cloud computing. Now, aging core systems are codependent with decades of messy patchwork add-ons — leaving traditional banks slow to meet the basic needs of today’s customers and regulatory bodies.

Your teams need approachable ways to swap old, unintuitive, redundant components for future-proofed systems. Let’s explore how process-driven tech can help incumbents mitigate the risks of outdated systems for attractive, agile service.

1. Democratize development with a dynamic, interview-style experience

Upkeep for your core banking systems plays an essential role in keeping your backend workflows stable, secure, and useful. As support knowledge ages out with retiring in-house programmers, you face an expensive search for experts to translate your teams’ needs into dying programming languages. 

The alternative: Instead, give your teams DIY tools to thread your systems together using their firsthand workflow experience.

“Low-code” tools democratize the workflow programming process, turning employees into citizen developers with drag-drop flowcharts and other clean user interface elements. Simple Q&A-style setups tease out precisely what your staff wants to accomplish — while keeping them in the guardrails of your preset business rules.

Long-term maintenance becomes simple when you cut IT’s burdens and create fresh support talent using nearly any staff member.

2. Enforce checks and balances to bridge monitoring gaps in legacy banking systems

Decision-making isn’t always reliable when your legacy banking systems lack the agility to pinpoint and probe red flags on customer accounts. If your core systems and applications don’t easily highlight problems during sanity checks, your teams could miss big issues that leave customers open to fraud and accounting errors.

The alternative: In cases where your sanity checks arouse suspicion, leverage smarter process overlays to auto-flag and route cases for additional manual approvals.

Human eyes can only audit issues they’re aware of, but they’re also a critical defense against account mistakes — and more often, account fraud. Modern process orchestration tools give your systems a responsive net to catch and instantly pass countless activity alerts to the right teams.

With this helping hand, your teams can efficiently address (and reduce) unwanted activity across your whole banking organization.

3. Learn customer behaviors quickly and deeply via AI and ML

All case reviews — manual and automated — require that your teams and tools are aware of each account’s unique activity patterns. Legacy banking systems aren’t flexible enough to dissect the mountains of data across all your bank’s accounts in a time-sensitive fashion. In addition, this decades-old tech simply cannot adapt on its own to trace patterns at all.

The alternative: Machine learning (ML) and artificial intelligence (AI) tools spot patterns to separate normal behaviors from suspicious activity — in real-time.

Predictive technology is becoming mission-critical as traditional banking systems digitize and grow vulnerable to digital access 24/7, from anywhere on the globe. While millions of accounts create tons of data points to connect daily, ML is able to sift out the odd and malicious activity by learning from “normal” trends.

Predictive decision tools help you remain proactive in account security. They also keep you in compliance to supply regulatory bodies with a clean, well-documented audit trail.

4. Adapt faster by delivering overlays faster than your in-house coding

Adaptive tech should be an organization-wide focus to compete with the rapid evolution of challenger banks. However, coding your new solutions atop dated systems will reinforce their rigid, interdependent nature. As your solutions tangle like weeds, your iteration cycles will drag far behind your modernized competitors.

The alternative: Embrace the modular process overlay solutions that‘ll keep you agile against any risk, operations, and regulation-based changes — at 20 times the pace of your own coding cycles.

Upgrades no longer demand a complete DIY swap of your bank’s entire backend: you can piecemeal existing solutions for an easy transition by design. Whether you’re making the move to cloud systems or adding on other services, third-party process overlays sort out your systems for a custom feel without countless hours of custom labor.

With more predictability in your infrastructure, you can redirect those unnecessary coding labor hours towards introducing API-friendly solutions tailored to your needs.

5. Unlock data silos to everyone (and never migrate data again)

Beneath all these tools is the demand for accessible data across the wider banking organization. Legacy banking often silos this data across business functions, units, and departments, grinding even simple account openings to a crawl. Collaboration is slow and redundant, compliance is tedious to assure, and your bank will never improve its products and experiences at the rate of your modern competitors.

The alternative: Crush the walls between silos with a central view into all the bank’s data — releasing the data flow for all staff, systems, and applications to leverage.

Visibility underpins the success of every process, whether automated or manual. With a central process overlay, teams can avoid collecting information already living elsewhere in the bank. Auditing data gets easier too: data is cleaner upon intake and it’s easy to extract the precise reports you need to prove your compliance.

When data flows freely, it’s available to fuel any automation, marketing initiative, or audit preparation you’ll need to succeed among today’s banking options.

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