By Darragh Pelly, COO and co-founder, Reitigh Software

‘Legacy’ is often regarded as a dirty word in the financial services sector. It conjures up images of ancient, creaking technologies that are no longer fit for purpose. The reality, however, can be very different. 

While legacy systems do demand our attention, much of this ‘obsolete’ technology still works – and works well. If companies think of them as foundations rather than failings, there is the potential to avoid spending millions of pounds on large-scale digital transformation projects.

The key is to work with, not against, legacy systems – and here’s how.

Re-imagine digital transformation 

Financial services organisations need to change their digital transformation mindset. Just a quarter (26%) of firms recognise that transformation is a continuous process — suggesting that the majority still see it as a destination rather than a journey. The truth is that these transformations are never one-off initiatives. 

This misconception leads to one of the most common points of failure in many organisations’ digital transformations: they try to do too much in one hit. There is no need to overhaul everything at the same time. The primary focus instead should be on getting legacy systems to talk to modern platforms. This approach will enable firms to transform the front-end efficiently and cost effectively – whether they are looking to build a new broker portal or improve interactions with clients. 

Darragh Pelly

Automate the right processes 

There has been a lot of industry focus on robotic process automation (RPA). While this can certainly help on the road towards digital transformation by streamlining manual tasks and eliminating human error, it is not a silver bullet. The main risk here is that companies will automate inefficient and ineffective processes – doubling down on something that is already not working for them.

RPA should instead be seen as a steppingstone towards straight-through processing (STP), which ensures a far cleaner flow of data. This is a new system – but it can be easily integrated with legacy infrastructure and ensures compliance with regulatory requirements and financial disclosures.

Turn to tech translators  

Many legacy systems and applications are run by legacy programmers. Now, with an increasing number of developers heading towards retirement, financial services firms need to get a solid succession plan in place.

The pressure is on to bring in multi-lingual tech talent. Not only do we need people to translate between actuaries and IT, we also need them to translate between legacy systems and modern platforms. This is where specialist consultancies – which have carefully selected expertise built-in – can play a lead role.

Tech translators will make sure companies do not need to change every system and will instead focus on delivering against digital transformation programmes by layering on top of existing technology. By showing respect and learning the language of legacy systems, they will help companies to avoid risky and costly projects.