Banks should upgrade legacy systems to remain competitive, according to the latest research from consultancy Capgemini.

Despite increasing demands created by regulations, compliance and a changing economic environment, almost all the top retail banks worldwide are still using systems dating from the 1960s and 1970s, says the study.

Industry consolidation, increased customer transaction demands and data management are also limiting the capabilities of core banking systems. As a consequence, more than 90 per cent of banks polled are now willing to have global common structures and applications.

Financial institutions are increasingly requiring sophisticated transaction processing software that is able to handle large transaction volumes and provide visibility of customer use of banking products.

“International legislation and regulation necessitate more transparent and understandable products,” said Capgemini Netherland’s principal consultant Gert Jan van Dorsten.

“Higher flexibility, such as adaptable mortgage products, is required by some customers and changes to pricing structures such as the introduction of risk-based pricing and package-based pricing are required to attract customers,” he said.

“These changes would enable banks to strengthen their competitive position on the market.”