Blockchain is never far from our thoughts it seems, with the recent flurry of articles now focusing more on the ‘when’ rather than the ‘what’.
Opinion appears to be polarised, with some commentators suggesting it will be well into the mid 2020s before we see any real impact from distributed ledger technology, while others claim a much quicker evolution. Who knows, but what I find much more interesting
is ‘how’ we can adopt it.
The Dilemma of Migration
I continue to hear from the banks that the only vendor solutions likely to get any traction are those solving tangible regulatory problems or delivering real cost savings – demonstrated in months, not years. Otherwise changing any system, let alone a huge
upheaval to accommodate blockchain, is not high on the agenda right now.
It follows that many vendors who cannot demonstrate a very clear return on investment or valuable so-called ‘regtech’ benefits, are struggling to hit their numbers. The whole process of migrating to a new service is costly, time-consuming and not at the
forefront of buyers’ minds.
Likewise, I increasingly hear vendors bemoaning that their new replacement and potentially disruptive service is far better than the incumbent (and it almost certainly is) but the buyer is looking at a certain multi-month, if not multi-year, migration path.
Time, of course, is money. If even sole platform migrations are historically lengthy and costly processes, perhaps the people who see blockchain as a medium to long-term nirvana are right?
Dealing with data
The process of migrating platforms has many facets but the central concern is the movement and control of data. Given that most banks’ central IT departments ‘own’ the data of the business, it is no surprise that migration projects are greeted with a lot
of shaking of heads, furrowed brows and the creation of multi-year project plans.
It is a shame that the historical approach to migration is still embedded in the ways of old and as a result the term ‘legacy’ has become so well-used in the banking world.
All too often it becomes overly long, painful and expensive to change, so the old system is patched up and, voila, we have core systems in their fourth decade in many cases.
With such a huge investment in new, challenger fintech services over the last few years it seems a pity that their adoption is often halted by the time it takes to move data.
Perhaps, if vendors could assure their clients that migrations can be cut by such an amount as to see a return on investment – and within a timeframe that justifies the decision to move – then both sides win?
If the industry starts to look at faster and better ways to control and migrate data, then not only will we see quicker adoption of new, better services but also a pathway for blockchain as and when it finally come to fruition.