Banks need to identify how they can modernise their operations to keep up with advances in the digital economy, or risk losing customers and revenue as the market transforms around them, according to UK technology industry body Intellect.
Addressing banking executives at the launch of Intellect's "Financial Infrastructure Programme" yesterday, chairman of Intellect financial services and financial infrastructure programmes Keith Saxton said: "We struggled when we started looking at this [in 2010] to point ourselves in the right direction because of the problems in the market which are still here today, things that are structurally impeding the market."
Saxon, who is also director of financial services at IBM Research, added: "We should look at this as a five- to 10-year journey. This is not an attempt to rip and replace IT. We are not about to make recommendations like the NHS and build something that is not fit for purpose [such as the National Programme for IT]," he said.
Last August, Intellect published a report that said banks' IT infrastructure was no longer fit for purpose, citing the 2008 banking crisis and recent system failures by UK retail banks as evidence of serious weaknesses.
In the same report, Intellect estimated that about 80 to 90 per cent of banks' technology spending goes on managing and maintaining legacy systems and that only about four per cent is spent on improving operations and the customer experience.
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