To increase shareholder value, focus needs to be given to new technology initiatives.  As the backbone to supporting revenue growth from new products, to managing risk, improving operating margins, responding to changing global markets or enhancing client relationships, the value of creating a strategic approach to technology requirements is felt across the industry.

However in a market saturated with legacy technology, and ineffective management information creating limited transparency for transaction banking, identifying where the real value is coming from and where poor performance exists is not easy.

Unfortunately many continue to rely on sub-scale manually intensive operations with legacy systems that are difficult to change without a strategic approach to the future state technology architecture.

The technology infrastructure needs to be flexible and adaptable, to support the evolving needs of the business - whether this is to support the acquisition of new clients, introduction of new products or the adoption of new regulation.

A key decision in terms of the strategy is whether to buy technology from third-party vendors, or develop technology in-house. Depending on the bank’s overall market strategy, geographic footprint, customer base and resources will determine it’s approach to the strategy.

The inefficiencies of existing legacy systems are a major stumbling block in terms of both improving flexibility as well as achieving greater STP.  Banks should be demanding interoperability from their service providers. Only once these issues are addressed can STP be achieved.

The development of the future state architecture and alignment to business strategy is not a small task. Capco’s industry professionals have worked with many leading providers to address such problems, using its ‘Architect, Design and Planning’ tool to help define future state requirements.

The outputs from the architecture process are geared to helping identify:

• Appropriate logical technical architecture and consensus on the way forward
• Prioritisation of strategic investments
• Opportunities for standardisation and reuse of the cost base