Legacy technology can be a major obstacle to digital transformation projects and, according to a new survey of financial services technology decision makers carried out for business consultancy Janeiro Digital, almost 51 percent say existing technology is holding back innovation.
Three of the biggest roadblocks are seen as lack of support for change (34 percent), legacy technology and infrastructure (31.6 percent) and a lack of in-house technical skill (29.5 percent).
As a consequence 23 percent of respondents believe their company is behind in digital transformation compared to others in the industry.
Only 47 percent are currently implementing new technologies, with 12.6 percent wanting to do so but not having started. That leaves 40 percent not innovating which could see them lose out in a world where consumers want better, faster financial products.
"Fast-moving fintech disruption brought on by emerging technologies such as blockchain and machine learning has financial services organizations racing to overhaul their businesses to avoid falling permanently behind their nimble startup counterparts," says Matt Rossi, vice president of technology at Janeiro Digital. "However, there's a right way and a wrong way to build these new solutions. Enterprises should be creating a sustainable platform that can serve as a 'spine' for their digital enterprise. They need a flexible architecture that creates applications in the form of building blocks, which are easier to swap out as their business needs evolves."
When asked about the opportunities technology can offer the financial sector, 36 percent see greater back office efficiency as one of the biggest. 33.7 percent see the biggest opportunity in online marketing and customer experience, and 12.6 percent identify business intelligence as the best prospect.
IT (30.5 percent) and the executive team (27.4 percent) are the two business functions that most often lead new technology initiatives. However, the report points out that their approaches can conflict. The executive team may have a picture in mind of what they want the business to look like, but they need the help of IT to find the right path to achieve their goals. On the other hand, while IT has a deep understanding of the challenges that may cause an initiative to fail, they may have a hard time conveying those realities to an executive team that doesn't understand the complex dependencies and technical debt that exist within their organization.