BrainBlog for IBM by Jason English
We already covered how mainframe modernization isn’t just for the financial industry, so why not address the elephant in the room? The world’s biggest modernization challenges are concentrated in the banking industry.
Before the internet and cloud computing, and before smartphones and mobile apps, banks were shuttling payments through massive electronic settlement gateways and operating mainframes as systems of record.
Financial services companies are considered institutions because they manage and move the core aspects of our global economic system. And the beating heart of financial institutions is the IBM mainframe.
Banks have the most to gain if they succeed (and the most to lose if they fail) at bringing their mainframe application and data estates up to modern standards of cloud-like flexibility, agility and innovation to meet customer demand.
Why mainframe application modernization stalls
We’ve experienced global economic uncertainties in recent memory, from the 2008 “too big to fail” crisis to our current post-pandemic high interest rates causing overexposure and insolvency of certain large depositor banks.
While bank failures are often the result of bad management decisions and policies, there’s good reason to attribute some blame to delayed modernization initiatives and strategies. Couldn’t execs have run better analyses to spot risks within the data? Why did they fail to launch a new mobile app? Did someone hack them and lock customers out?
Everyone knows there’s an opportunity cost of putting off mainframe application modernization, but there’s a belief that it’s risky to change systems that are currently supporting operations.
Community and regional banks may lack the technical resources, whereas larger institutions have an overwhelming amount of technical debt, high-gravity data movement issues, or struggle with the business case.
Banks large and small have all likely failed on one or more modernization or migration initiatives. As efforts are scrapped, IT leaders within these organizations felt like they bit off more than they could chew.
Transforming the modernization effort should not require a wholesale rewrite of mainframe code, nor a laborious and expensive lift-and-shift exercise. Instead, teams should modernize what makes sense for the most important priorities of the business.
Here are some great use cases of banks that went beyond simply restarting modernization initiatives to significantly improve the value of their mainframes in the context of highly distributed software architectures and today’s high customer-experience expectations.
Read the entire BrainBlog here.
