But having a lot of legacy systems is no reason to hold back on the journey to the cloud.
Kyndryl’s Damiani advises modernizing selectively. For decades-old monolithic applications, the best strategy is often not to modernize at all, he says. “Find the fit for purpose. Transaction-heavy applications that require extreme power and low latency are generally best suited for mainframe or other high-performance systems. This does not mean, however, that you cannot modernize at the consumer edge, bringing better analytics and other consumer-enhancing features to support [consumers].” Banks can protect against obsolescence by separating code from infrastructure and exposing services on legacy systems by using APIs that click into modern applications. Many legacy applications can be shifted to the cloud, virtualized, or encapsulated in software containers to achieve immediate performance and scalability benefits. Selectively exposing services enables banks to modernize their legacy applications in stages or replace them without significant disruption.
Banks are constantly debating between build versus buy and custom versus commodity tech buying decisions. If they can build an application that integrates best-of-breed technology features from an ecosystem of vendors and leverage DevSecOps to manage their technical spread in a secured environment that ensures regulatory compliance, incumbent banks can adapt innovations much faster and cheaper. This enables them to compete with digital disruptors.
And don’t forget to ask vendors to shoulder some of the burden. “Ninety percent of banks’ back-office apps are customized off-the-shelf,” Damiani says. “When working with these vendors, ensure that their product road maps match modern architectures and release methods.”
Banks should make a point of selecting a cloud partner that has had extensive experience managing on-premises, private, and public cloud environments. An experienced partner can help answer such critical questions as: