2000-2010: The Decade of Legacy Upgrades

By Steve Discher
Executive Vice President

As we look to the future, I wanted to pause and give the financial services industry its due credit for making substantial progress in upgrading core information and processing systems over the past several years. Just before the last decade began, the industry was focused on Y2K (and then recovering from Y2K fatigue). Since then, many of you have been busy upgrading core policy administration, workflow, financial, and customer information systems and processes. Over the past decade, the foundational technologies supporting the financial services industry have matured to a point where executives have agreed that it’s worth the cost and risk of replacement. For those of you who have completed this monumental task, congratulations! You have positioned yourself to be a more efficient, nimble competitor and a better service provider to your customers.
 

More recently, many of you also took advantage of the economic lull of the past few years to invest in the proverbial house-cleaning, especially around core technologies and processes. We’ve had the good fortune of working with many of you on these efforts to upgrade core technologies, redesign processes, and harvest the benefits of more flexible and efficient business systems. Several others are in the process of doing the same, anticipating an economic rebound that we are starting to see.
 

While a good majority of companies have replaced these expensive, inflexible legacy systems, there are still a few who have not, largely due to the immense expense and a challenging business case. The fact of the matter is this: it’s unavoidable. If you haven’t reached a tipping point, you most likely will in the next decade. Support costs, sparse legacy technology skills, limited vendor support, and the time needed to implement even basic changes make it too risky and costly to hold off much longer.