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Banks are reducing their long-term reliance on legacy mainframes and planning to move a significant part of its functions core of business for cloud to launch new products faster and stay competitive, according to a new study by Accenture.
Entitled “The great cloud mainframe migration: what banks need to know,” the study is based on a global survey of 150 banking executives whose institutions are planning or already starting to migrate their mainframes to the cloud.
The study showed that about four in five respondents (82%) plan to move more than half of their workloads to the cloud – including nearly one in four (22%) who plan to move more than three rooms.
Most banks have started to migrate certain applications to cloudbut still has the technology of mainframe for most functions core of the business, including customer records, payments, investments, risk and compliance.
“While many banks have adopted the cloud for customer-facing systems such as mobile and online banking and employee tools such as email and video conferencing, they still rely on older mainframe technology for core business functions.”, said Luís Pedro Duarte, Vice President, responsible for Accenture’s Financial Services area in Portugal.
“They have advanced as far as they can and important transformation needs are on the table to tackle and a sharpening of the ability to attract talent that does not see a career in technologies for more than 30 years. Faced with rising interest rates, competition from fintechs and increasing competition in digital products and channels, banks need the cloud to help them quickly drive innovation in banking products and services.. Only there will they find technological evolution to free them from the shackles that limit them today.”
“While many banks have adopted the cloud for customer-facing systems such as mobile and online banking and employee tools such as email and video conferencing, they still rely on older mainframe technology for core business functions.
”They have advanced as far as they can and important transformation needs are on the table to tackle and a sharpening of the ability to attract talent that does not see a career in technologies for more than 30 years. Faced with rising interest rates, competition from fintechs and increasing competition in digital products and channels, banks need the cloud to help them quickly drive innovation in banking products and services. Only there will they find technological evolution to free them from the shackles that limit them today.”
Luís Pedro Duarte, Vice President, responsible for Accenture’s Financial Services area in Portugal.
The study notes that these banks see strong arguments for migrating mainframe, such as speed and agility; the security; and the ability to scale resources as strong drivers of migration (referred to by 43%, 41% and 37% of respondents, respectively).
Among the main challenges or barriers related to the migration of mainframe to the cloud are the risk of business disruption; lack of knowledge about how the code works; the ability to attract and retain the right technological talent; and the regulation of security risks and compliance.
“Banks are good at recruiting and investing in young talent, but retention is a challenge. Successful banks are reshaping their cultures by creating roadmaps for the skills they need in the future, developing strategies to hire new talent pools, and upskilling their workforce. Some are also dramatically increasing their use of external talent pools and embracing remote and hybrid workforces.
Addressing talent challenges will be crucial for banks to achieve their mainframe migration goals in the years to come.”
Luís Pedro Duarte, Vice President, responsible for Accenture’s Financial Services area in Portugal.
Some important conclusions:
- Banks see the cloud as an opportunity for efficiency as the costs of mainframe increase. The vast majority (91%) of the banks surveyed stated that the cost of maintaining mainframes has increased in recent years.
- Talent needs are specific. Banking executives surveyed see greater demand for skills cybersecurity (47%) and security solutions cloud (46%), including the ability to design virtual infrastructures based on cloudplatforms and applications for speed and agility.
- The majority of legacy mainframes is between five and 20 years old. 58% of respondents said their systems of mainframe they are between 5 and 10 years old; 27% are 11-20 years old; and 9% are 21-30 years old.
- Public cloud is the preferred option for system migration core. Almost two-thirds (63%) of banks plan to migrate their workload from mainframe for environments of cloud public.
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