EngineeringBeat: Navigating mainframe modernization complexity
Overcoming digital transformation challenges in banking
Mainframe modernization—migrating core applications to a more advanced technology environment—isn’t really an option; it’s an imperative. As technology evolves, global and US banks are increasingly under pressure to modernize their tightly coupled, complex mainframe systems to boost agility, leverage modern tools, and enhance security. The right modernization and cloud migration strategy can help modernize legacy systems and enable the digital transformation that drives innovation.
Strategies to meet the modernization imperative
For most global and US banks increasing customer expectations, maintenance costs, operational risks, and regulatory demands are critical modernization drivers. Historically, however, high failure risks, cost overruns, and funding challenges have stymied modernization efforts. To navigate these challenges, banks must adopt tailored, strategic approaches to modernization. Here are five strategies that can help:
Accelerating modernization: How one global bank successfully overcame modernization challenges
The bank faced legacy technology hurdles to drive growth and provide superior experiences to its high-net-worth clients. It was also having difficulty in addressing talent risk and institutional knowledge. To overcome these challenges, the bank needed to drastically modernize its technology, including maintaining and moving off the mainframe, which would afford significant autonomy, innovation (FinOps, GenAI, etc.), speed to market, and enablement of its strategic business priorities.
To assess potential modernization benefits, the bank performed a detailed analysis of current spend on its mainframe, then benchmarked those costs to potential modernization costs. The analysis showed that a business value-based approach to mainframe modernization could lead to reducing mainframe talent dependency by approximately 75% and decrease time to market by about 40% overall via improved developer productivity with modern engineering practices by 2028.
The time to modernize is now
Competition in banking is fiercer than ever, and modernization offers the crucial advantage banks need to innovate faster and capture market share. Successful modernization produces significant benefits, including improved innovation capabilities, enhanced customer experiences, cost optimization, increased security and compliance, and the ability to attract top talent. While challenges exist, the right strategy can smooth the path. Modernization is not a choice; it’s a necessity, and the time to act is now.
Michelle Gauchat
