Contributed by Nuxeo
Written by Jeanette Sherman, Sr. Product Marketing Manager, Nuxeo

Modernization happens in waves, and today’s seasoned executives have watched the tide ebb and flow. Luckily, emerging technology offers financial services organizations the possibility of escape from the unending cycle of deployment, upgrade, and obsolescence.

When financial organizations deploy new systems, they get ahead of the competition. As time goes by, the advantage fades, as competitors deploy similar software or next-generation solutions with even newer capabilities.

According to Fidelity National Information Services (FIS), financial institutions with the most advanced operating models have been growing nearly twice as fast as the rest of the industry. Digital innovation, automation, and emerging technology strongly correlate with success in financial services today.

Software life cycles make timing critical to financial services modernization efforts: 1) modernize too soon and miss out on emerging technologies not supported by the software you choose, or 2) wait too long, and competitors with the technological upper hand will capture market share.

Challenging the Status Quo of Temporary Transformation
Transformation leaders in financial services organizations today can feel like they’re on a merry-go-round of modernization efforts that become obsolete nearly as soon as they’re deployed.

As time between deployment and deprecation shrinks, organizations see greater-than-expected costs and reduced ROI from transformation initiatives. For example, long-term strategies give way to short-term fixes and additional solution purchases that create disconnected, siloed “shadow IT” systems.

Instead of buying another inflexible solution destined for the develop → deploy → deprecate life cycle they know all too well, forward-thinking IT leaders are moving toward a flexible “building block” platform architecture that supports continuous deployment and an agile approach to development.

The API Revolution Will Not Be Rip-and-Replaced
Inflexibility prevents a future-proof modernization strategy. Monolithic, inflexible core systems increase operating costs and reduce opportunities for revenue generation. They also create greater institutional resistance to change as worries mount that replacement could be riskier than simply continuing to work with expensive, aging technology.

The future is flexible. API-first platforms form the core of an agile information strategy for financial organizations aiming to power faster application development while enabling new services and applications to use content and data across previously siloed systems.

By focusing on a flexible path to modernization, financial services organizations can avoid rip-and-replace fiascos like the one that impacted one major UK bank in 2018, as nearly two million customers found themselves locked out of their accounts for days, unable to manage accounts or pay salaries, after a botched platform upgrade.

API-first platforms make it possible for banks to fit new microservices together like building blocks, taking away the need for total replacement of large, inflexible systems. As technology continues to evolve and new services develop, financial organizations can simply swap in a new “building block” and swap out the old one.

The Path to Painless Platform Modernization
Shifting from a legacy solution-based model to an API-first platform that connects core systems to an evolving ecosystem of microservices can seem daunting — but managing these changes doesn’t have to interrupt normal operations for the customers and teams that rely on your information systems.

To ensure hassle-free transformation, platforms should meet three criteria:

  1. Cloud-native: Security and performance are mission-critical for financial organizations, and cloud-native platforms are the best way to ensure easy connectivity while using content in secure, performant ways.
  2. Highly-scalable: Content growth shows no signs of slowing, as IoT and always-on digital technologies produce more information than ever before. The future belongs to platforms with the capacity for hyperscaling to accommodate unlimited information proliferation.
  3. Highly-configurable: The key to survival in fast-changing environments is adaptability. Platform configurability is the key to success, as this allows for rapid iteration, rather than expensive, time-consuming custom development.

Using a platform that meets these three criteria, financial organizations can push ahead of competitors still stuck in the rip-and-replace cycle, while eliminating the service disruptions and security breaches that have too often accompanied modernization efforts.

The End of Obsolescence: Disrupting Traditional Document Management
Since software was first developed on punch cards, it had a life cycle that echoed the animal kingdom: it was conceived (planned), born (launched), lived (functioned), and then died (deprecated).

Now, cloud-native, API-first platforms have created the capability to continuously deploy updates and integrate the newest tools and technologies. With the right platform architecture, financial organizations no longer need to be concerned with the modernization timing game, and can continue to gain competitive advantages from emerging technology without requiring yet another system replacement.

With a modern platform architecture, the life cycle of critical business systems can more closely resemble a house: as components reach the limits of their functionality, they can be replaced individually with minimal impact on the occupants.

Want to achieve modernization success? Explore how financial services organizations are leveraging microservices-based APIs in this complimentary guide.

Nuxeo
Nuxeo partners with banks, financial services firms, and insurers to help modernize legacy systems and deliver information-rich customer experiences. Nuxeo’s low-code content platform powers intelligent business applications with AI, native workflows, automation, and more.

Jeanette Sherman: jsherman@nuxeo.com