Indeed, when it comes to legacy systems, in addition to the title, a number of other expressions or images also spring to mind, such as “mutton dressed as lamb” or “lipstick on a pig”. The trick is to scratch off the paint to reveal the true nature of what lies beneath. Even then, assessing the technology requires some deeper thought and analysis with regard to measuring how fit for purpose and future-proof it really might be, taking into account the business’s needs and ambitions going forward.

For example, in the market for core banking systems, one can probably categorise the currently available financial services technology solutions broadly into three main buckets:

A)    Mature systems, that have evolved layer upon layer through a combination of development and integration of other acquired systems and/or databases, with superficial outer skins that give the appearance of using the latest technology concepts;

B)     Mature systems that have evolved entirely through organic growth and development, but, either for strategic or market-driven reasons, have been completely re-engineered in more recent times to embrace the latest technology concepts;

C)     Newer, less mature systems, that were conceived and built, or are still being built, from scratch using the latest technology concepts.

The solutions in bucket A are bound to enjoy a level of richness in functionality and may appear to offer an attractive option. They probably have a large legacy installation base and, given their age and maturity, have a recognised brand with a marketing machine that can churn out new lingo to describe the same old underlying concepts. For example, the latest fad is to describe a system as “composable”, which is really just a new way of saying that it uses APIs and services. Similarly, “cloud” is a way of saying, for all practical purposes, that the solution can run on virtual distributed servers in containers and is therefore incrementally scalable or elastic.

Jumping to bucket C, we find nascent solutions, often initially built around delivering the relatively uncomplex needs of payments, electronic money and retail banking institutions. These solutions are naturally native to the latest technology concepts, such as “cloud” and “composability”. However, very few, if any, have evolved to the necessary level of maturity to offer reliable, stable solutions for more complex financial services use cases, such as those required in order to offer a broad range of asset and wealth management products and services, especially in the context of multi-participant post-trade flows, for example.

Sitting in the middle are the solutions that fall into bucket B. Interestingly, there are not so many of these, as most that may have been candidates for this scenario would have either become the “acquiring” or the “acquired” party at some point in time and, therefore, ended up in bucket A. Only a fairly unique set of circumstances, with stakeholders that have demonstrated an unwavering vision for the company and its product, could result in the almost perfect scenario of a system with mature, proven, deep functionalities that embrace the latest technology concepts, such as “cloud” and “composability”, with a truly open service-oriented architecture (SOA) and a platform-agnostic API approach.

So, don’t be afraid to do the equivalent of an “acid test”, because, as the line goes from the Shakespeare play, A Merchant of Venice, “all that glitters is not gold”!

Alan Goodrich, Regional Sales Manager at ERI

Fellow of the IAP (Institution of Analysts & Programmers)

is the supplier of the OLYMPIC Banking System, offering award-winning levels of innovation, real-time process automation and compliance.