OutSystemsPerspectives

Under Investment in Banks is Causing Major IT Headaches

A number of recent articles put the spotlight on the latest computer glitches that resulted in down time on Cyber Monday. One can reasonably conclude that banks could stand to invest more in their IT systems to increase their ability to deliver good customer service and further protect customer data from attacks. In fact, RBS’s new chief executive Ross McEwan admitted to the press that the state-run bank had under invested in IT for decades. He made the claim while apologising for the ‘unacceptable’ technology crash that affected one million RBS customers on Cyber Monday. He also pledged to outline plans in 2014 to ‘invest in the future’ and make RBS the bank ‘customers and Britain needs it to be.’

Clearly there is growing pressure on banks to overhaul their IT systems. As banks look to put new technology initiatives in place to better run their systems, they also have pressure to ensure that these new projects get to market quickly as the added reputational damage of another technology glitch would be tough for any bank to bear.

The Cyber Monday event surprised me. The barriers to entry are relatively low and many global banks are getting ahead with much more advanced digital strategies, yet many banks are clearly lagging behind. Enabling customers to pay and transact online, using mobile devices is fundamental to the future of banking. Banks need to be thinking about how payments will be made in the forthcoming years. For example, today there are mobile apps that can scan-in cheques, new digital currency technologies such as Bitcoins, and many new and advanced ways to pay. Will UK banks lose out because their technology is poor and customers either get left behind or disenchanted with the service and through frustration move on to another provider?

Banks need to consider how such glitches and the resulting publicity impact customer loyalty. Spikes in business, such as that experienced on Cyber Monday, must have been expected. Surely the banks should have been better prepared. Recent published figures show that retailers generated 15 times more revenue on Cyber Monday than they did on 1st November. When such spikes are inevitable, banks need to consider ways to scale out their systems. Building an on-premises architecture optimised for such spikes in business however is prohibitively expensive. The most cost-effective way to have the ability to scale up when sales are up is to take applications out to the public cloud. Using the cloud is a great way to handle those peaks in business without having to invest in hefty infrastructure costs. Then when the spike drops, banks can bring it all back in-house.

Generally, when looking to update development environments, building in agility is key. One of the ways to reduce time to market is to have an agile development environment where changes can be made more easily without causing huge delays. Whether banks are implementing new products and procedures or other new processes and services, they will need to create efficiencies in their software development processes whilst mitigating the risk of delays, rework, and spiralling costs, which can slow the time to market of applications.

In my experience, IT departments in big enterprise organisations, like banks, still get far too bogged down in management and maintenance, which leaves very little scope for new projects and innovation. In fact, according to Gartner, at least 80% of the IT budget is still spent on maintenance. I believe that IT has the ability to deliver the secure, modern IT infrastructure that clearly RBS and other banks need in order to delight customers. IT departments however need to focus on creating a more agile environment and it must look at the role that advanced technology solutions can play – all of which can help to release IT from its technology shackles.

In 2014 and beyond banks must build an environment that has the ability to adapt to business change quickly and can handle peak times better. However, often IT doesn’t have the manpower or the resource to achieve this on its own. This is where OutSystems can help. We deliver applications that are built to change at the speed of business. We help to simplify application management and development enabling hundreds of enterprise companies to rapidly deliver complex and highly scalable enterprise web and mobile applications. So, not only can we help improve IT productivity and responsiveness, with the OutSystems Platform we can enable you to deliver more innovative, modern applications that support the drive to bring banks into the 21st century.

This latest incident saw RBS’ shares fall 12 percent overnight. No business can afford to let that happen – state or private-owned. The pressure is on now for UK banks to find ways to sort this out quick.

About the author

Zahid Jiwa

Tech savvy and geek-at-heart, Zahid has a keen interest in UX, web and application development, innovation, and helping application developers deliver new projects to the business. Zahid is a keen straight-talker when it comes to topics that he is passionate about.

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