Over the weekend Lloyds (along with Halifax, TSB and Bank of Scotland) lost part of its debit card and half its ATM services for three hours due to problems with some of its servers. This follows on from the recent RBS saga and underlines the issues facing the established banks as they try to deal with large, legacy systems that constantly need updating in the face of new regulation, more competition and greater demands from their customers.
The regulator has already complained about “antiquated” IT, see here, and we have repeatedly highlighted the need for banks to get more outside help, see More FS outsourcing – key theme for 2014. The announcement of the Lloyds problem therefore comes as no surprise.
Established Financial Services companies are in an invidious position. Dealing with their legacy systems soaks up the majority of their budget and in-house IT capability. Also these systems are generally extremely complex with many inter-connecting applications and multiple generations of technology. To support these customers, SITS vendors need to offer high quality advice and delivery capability, based on sound domain knowledge and a long term strategy. There is also the opportunity to provide them with access to scale advantaged utilities and more standardised applications. Our FinancialServicesViews research stream will return to this issue over the coming months. If you want to learn more about this service, please contact Deb Seth of our Client Service team.