This report looks at the progress capital markets firms have made in modernizing core technology infrastructure and the drivers of change. It evaluates the business case for modernizing legacy applications and migrating to the cloud, which includes the fact that cloud is not always a cheaper option. It outlines a roadmap for running a successful migration project, including selecting the right tools and implementation partners to reduce risk and ensure an effective transition. It also looks at some future trends, including the role of artificial intelligence (AI) in modernizing legacy code and how the industry’s technology strategy could evolve.
It is not easy for C-suite executives at a capital markets firm today to manage their technology strategy. The industry faces multi-dimensional challenges, including market volatility, the move to faster settlement cycles and increasing cyber risk. Firms are grappling with how to use data for competitive advantage, scale AI and integrate digital assets and blockchain into their infrastructure. Competition from cloud-native firms continues to grow. At the same time, they must navigate geopolitical fragmentation and uncertainty. While change drivers previously came in waves, there are now many elements hitting all at once. This creates a need for a comprehensive technological transformation and modernization journey, often with the cloud as a key foundation block.
The need for change is driven by interlinked factors. For example, a looming skills shortage in legacy technologies and technical debt that reduces business agility, making it hard to adapt to regulatory changes such as the move to T+1. Data integration and access are key issues, particularly as building blocks for AI. There are direct costs to maintaining on-premises and mainframe licenses, infrastructure, middleware and personnel. Moreover, the optics of being seen as a modern company using the latest technology is desirable.
The move to modernize infrastructure is gathering pace among financial institutions. The majority of the world’s top banks continue to use mainframes but many see a pressing need to update creaking decades-old legacy systems. The primary solution is to migrate workloads from mainframe or on-premises platforms to the cloud.
This report has been written for business and IT decision makers at market participants, infrastructure providers and technology vendors seeking to understand industry dynamics and practical considerations around legacy technology modernization.
A direct link to the report for Finadium research clients is here
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