BoE’s warning on digital transformation disruption is misleading, says TmaxSoft

BoE’s warning on digital transformation disruption is misleading, says TmaxSoft
17.07.2018 11:56 am

BoE’s warning on digital transformation disruption is misleading, says TmaxSoft

Banking , Security , IT Innovations , Risk Management

In the wake of the TSB IT debacle, the Bank of England (BoE) and the FCA have given financial services firms three months to explain how they would deal with technology failure. The discussion paper outlines the importance of operational resilience and warns that banks could face fines if service disruptions lasts longer than two days. The regulators also caution that upgrading computer systems could lead to service disruption.

For many financial institutions, upgrading their IT systems is their only viable route to survival, as it enables them to compete with the uprising of challenger and digital banks. Therefore, their ability to safely and securely upgrade their systems is a crucial investment linked to creating significant operational efficiencies for the IT department and ultimately the whole organisation. Additionally, these IT migration projects are seeking to provide customers with a seamless and convenient mobile and web banking services that meet the demands and expectations of a 21st century customer. 

Discussing the FCA’s and BoE’s guidance paper, Carl Davies, CEO of TmaxSoft UK says: “Even before we started to see IT disasters play out in the public domain, due to the level of risk involved in largescale migrations, many IT leaders and CIOs have been delaying implementing their digital transformation projects. And now, with the FCA’s and BoE’s warning, these anxieties are likely to be heightened further still. This move will discourage the financial sector from taking on the change programmes they need to survive. At this stage, many traditional financial services firms should be making the necessary steps to move away from the legacy technologies, such as mainframes, that hold them back.

Davies continues: “Although BoE and the FCA’s acknowledgement of risks involved in IT projects is important, companies can minimise the chances of disruption by taking the steps required. When it comes to moving away from mainframes, one of the riskiest tasks is altering programmes and applications, or re-writing code. Re-engineering systems can take years, which means that the scope for error is far-reaching. However, financial institutions have the option to re-host their mainframes, meaning that they can simply lift existing mainframe assets and shift them to new open platforms. Re-hosting is faster, less risky, and helps systems to operate in the exact same way, but many organisations still choose outdated strategies that put them at harm.

“Although there are risks involved in any transformative projects, both the FCA and BoE should inform firms that there is a light at the end of the tunnel. Organisations will be in a much stronger position once they have migrated to new systems, achieving the desired outcome and becoming a modern organisation that provides customers with personalised, seamless and uninterrupted services. Transformation does not have to be a dangerous journey. It is therefore imperative that any organisation that is considering a transformation project first identifies any gaps in their knowledge and works with the right partner to secure the smoothest transition possible.” Davies concludes.

Related News

Saxo Bank announces H1 2018 results

Saxo Bank Group (“The Group”) reported a positive net profit of DKK 150 million for the first six months of 2018. In a period with low market volatility and the introduction of... Read more »

Industrial Bank Co., Ltd creates new Hong Kong Private Banking Business with Avaloq Banking Suite

Fuzhou-headquartered Industrial Bank Co., Ltd, one of China’s largest banking groups with total assets of CNY 6.09 trillion1, has selected Avaloq to provide a comprehensive... Read more »

Fast Blockchains as a Core of New Banking Technologies

It is no secret to anyone that the main banking systems around the world are eyeballing blockchain technologies as a potential panacea for the many issues that have been... Read more »

Compass Plus survey reveals consumers still don’t trust contactless payments

A survey conducted by Compass Plus, an international provider of retail banking and electronic payments software to processors and financial institutions, has revealed that... Read more »

Banks scored on quality of service

From today (15 August 2018), banks must publish information on how likely people would be to recommend their bank – as well as its online and mobile banking, branch and... Read more »

Canadian credit unions trial Amazon Alexa service

Canada’s first-ever authenticated voice banking service using Amazon Alexa, launches from creator Central 1 today. Central 1 clients – Innovation Credit Union and Conexus... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App