With fewer people visiting bank and building society branches in person during the pandemic, maintaining customer contact remotely was vital, and financial organisations were forced to accelerate adoption of new systems for digital engagement. Months later it is clear that customers still appreciate the flexibility to interact digitally and those new apps, portals and web bots are here to stay. Now the challenge for companies is how to minimise ‘technical debt’: the cost of reworking any quickly implemented tech changes made during the crisis so they are fit for the long term.
Fast-tracked technology changes now need further investment
In Europe, the use of mobile banking and financial apps increased by 72% as a result of coronavirus social distancing, remote working and other quarantine measures. NatWest Group revealed that it saw 485,000 new online banking customers and over 500,000 new mobile app downloads in the first half of 2020 alone.
However, research by Macro 4 suggests that 81 per cent of IT chiefs in large UK enterprises – including financial services companies – believe that the pandemic has forced organisations to fast-track technology changes to adapt to new ways of working. Now 72% feel further investment is needed to upgrade or replace IT implemented quickly during the crisis.
For example, during lockdown, with most people interacting digitally from home, around two thirds (64%) of organisations made technology changes to handle greater volumes of interaction on their websites, social media and other digital channels, the research suggests. But more than half (56%) expect to have to make additional IT investments to ensure these changes continue to work long term.
Strategies for handling the technical debt challenge
The survey confirms what most experts acknowledge: the pandemic accelerated the pace of digital transformation, but it is far from complete. Now, IT teams must address the technical debt from their enforced changes. Where possible they will want to minimise the impact on IT budgets by reworking quick fixes rather than completely replacing them.
Especially in digital customer communications, where innovation can provide a competitive edge, businesses should prioritise quick ways to integrate new applications and channels with existing infrastructure. At the same time, they must retain the flexibility to keep applying additional security measures to protect against emerging cyber threats.
Financial organisations have long recognised that huge systems replacement programmes are rarely the answer to the technical debt problem. A more agile approach is needed that allows rapid, incremental change.
Hence the growth in technologies that help businesses to get diverse business applications, communication channels and security measures working together more effectively. With different systems owned and controlled by different parts of the business, an important first step to becoming more agile is enabling better oversight of the existing technology landscape. The next step is to orchestrate improvement.
Augmentation versus ‘rip and replace’
Rather like a musical conductor, orchestration technologies guide the flow of interactions between new and existing business systems. Changes and improvements can be made quickly, without modifying individual applications. For example, a company could add a new SMS channel at a corporate level and the orchestration system can direct and reformat content from several separate departmental applications to create a consistent set of text messages throughout the customer journey.
The aim is to augment what is already there, by adapting content from existing applications to work with new channels, processes and security systems. This reduces risk and timescales compared with a ‘rip and replace’ approach where original applications are discarded.
In many respects the pandemic IT experience has only magnified a problem that was already there. For years, demands from customers, regulators and financial markets have been evolving at such a pace that IT systems have almost always had to play catchup. The difference now is that they must catch up faster.
The response to the pandemic has raised the bar. Quick solutions are now expected and there is no going back. Businesses need the ability to scale up and adapt those solutions over time, adding extra features – such as new customer services and products, – rather than replacing them. Technical debt can never be fully eliminated, but building in more flexibility to enable incremental change makes it possible to minimise the cost of reworking short-term solutions and keep businesses moving forward.
Lynda Kershaw is marketing manager at Macro 4
