Derek Britton, Director, Micro Focus
As technology evolves, and new trends emerge, employee demands and expectations of software applications consistently change. The proliferation of smart devices offers employees social, on-demand access to their favourite personal applications. This is driving users to expect businesses to provide the same level of accessibility for corporate applications.
Mobile Banking Trends and User Preferences
Mobile Banking is a great example. Close to two thirds (64%) of people online who hold a current account with a bank or building society would prefer to conduct their banking on the Web or via a mobile application[i]. And, as retail and commercial customers increasingly use mobile, employees will also see the benefit of mobile apps to perform tasks using tablet computers.
Derek Britton
The benefits to banks in meeting this demand for mobile apps on tablet devices are clear: anywhere, anytime accessibility allows organisations to easily perform or provide core business functions such as on-boarding new customers, and performing remote customer transactions. The efficiency, competitive advantage and cost management potential is significant.
UK-based banking giant Barclays, last November purchased 8,500 iPads to facilitate face-to-face customer interaction beginning with a new application enabling fast market-wide searches for mortgage loans.Today, financial services organisations represent the highest mobile device adoption of any industry sector, accounting for 24% of all enterprise mobile device deployments and 30% of iPad activations.
Challenges in Legacy IT and Mobile Access
However, in August 2013, an investigation by the Banking Commission revealed that banks were struggling to extend access to core applications on mobile platforms. The reason? They were found to have patchy and outdated in-house IT systems. These IT systems can make it difficult, time intensive and costly to develop apps for mobile.
The need to act quickly is growing, especially for established banks
With the introduction of more nimble challenger banks in the marketplace, the need to empower the workforce to innovate and become more productive is increasing. Challenger banks are not often weighed down by the responsibility of maintaining and managing a vast array of decades-old business systems, and supporting untold existing services. This means that they can quickly offer new services to customers and compete with established banks for market share.
Balancing Innovation With IT Constraints
The innovation challenge
Yet, the challenges of shrinking IT budgets, growing system maintenance effort and pressure to support dynamic environments threaten to eat into IT budget just to keep the lights on. In fact, Gartner Group states that 70% of IT budgets are spent on lights-on activities.
Without investment in mobile and new services development, software developers at established banks are less able to deliver innovation to the business. This is reflected in the CIO’s view of their development teams. A global survey of 590 CIOs conducted by IT market research firm Vanson Bourne and commissioned by Borland, a Micro Focus company, found that a third of CIOs consider their mobile development team to be sluggish, middling or outpaced.
Barriers to IT Investment and Transformation
Lack of investment and fear of failure
Chris Skinner, chairman at the Financial Services Club, networking group for senior executives in the financial sector, holds the opinion that banks should replace the traditional IT foundations in the light of digitisation and trends such as bring your own device (BYOD) or they leave themselves open to competitors. In doing so, Skinner argues, less will be spent on maintaining these business systems in the long term and more can be spent on innovative new development projects.
Ripping and replacing IT systems is not the panacea to the problems experienced with delivering applications to mobile platforms. Applications running on mainframes are stable, secure and efficient, irrespective of “backlog” or other operational concerns. According to research by IBM, between 70-80% of global 2,000 companies rely on mainframes to process core business applications, and mainframe revenues and processor usage continue to increase.
Modernizing Core Banking Applications
Modernisation: the core applications are key
The trick is to start from a position of strength. That position is the existing, working, trusted core applications that will likely form the backbone of any new ‘mobile service’ being requested. This means re-using as much as possible of what is already working, and only building new software when absolutely needed (in this case only the presentation logic for mobile devices). Rewriting the back-end application or ripping and replacing for the sake of a new user interface is overcomplicating an already complex IT task, not to mention an extremely risky undertaking[ii].
Many existing banking systems include green screen applications which can already connect the employee to core applications through web portals. However, these interfaces can all too often be cumbersome and difficult to operate, especially on a mobile screen. In fact, according to a Vanson Bourne survey of 590 CIOs, 98% of respondents claim new green screen features would enhance productivity, but many think modernisation is too difficult.
The future potential for these core systems is much more viable. Transforming the existing green-screen user interface and providing access from a choice of devices including web browsers and iPads is a very simple undertaking, possible within a matter of hours. Such technology can turn mainframe 3270 applications into touch-screen apps, and integrate customisable controls such multi green-screen tables, tabs, images calendars and drop down menus. All of which can be achieved without resorting to new application development, to provide a rapid and low-cost solution to business efficiency challenges. The option of leveraging this approach for internal users or external customers then becomes an internal policy decision, rather than a technical one.
Maximizing Existing Infrastructure for Mobile
Developing for mobile: use what works, build new interfaces
If banks really want to ensure their workforce is supplied with innovative technology across platforms, maximising the systems they already have will be quicker, and less costly than a system overhaul. This will drive a more efficient operation that will be better equipped to fend off competition from new challenger banks in a competitive market.
[i] http://www.finextra.com/news/fullstory.aspx?newsitemid=25590
[ii] Add reference to the Standish Group report.
