In Part 1 of this blog post, I'd described three issues with open systems that held banks back from transforming all their legacy applications to open systems.

Here are three more:

1. Sudden loss of functionality. In this brilliant article titled When Product Features Disappear – Amazon, Apple and Tesla and the Troubled Future for 21st Century Consumers, Steve Blank, the famous Silicon Valley serial-entrepreneur and the father of the Lean Startup movement, gives several examples of how vendors "unilaterally remove features from their products without asking their customers permission" even when users have paid for those features. Such arbitrary downgrades are painful enough for consumers but they can wreck havoc in banks.
2. Frequent UI changes. We've all been through perplexing moments when familiar software suddenly looks strange, with screens, links and buttons vanishing into thin air. This happened with Windows Vista a few years ago. I'm seeing this happen with Google Analytics now. To continue with the example I used in Part 1, the said social media archiving software recently changed the default option for search to "today's updates". I hardly need a search to track down my today's updates.  What I really want from search is to get hold of all past updates on a given topic. This was the default option before. Whereas, to run this search now, I need to go to another screen and select the "Lifetime" option, which is not only counterintuitive but takes up additional mouse clicks for no good reason. The new UI is an unwelcome change to me and, I suspect, for most users. It's easy to trot out philosophical statements like "change is the only constant", but vendors need to remember that the cost of retraining hundreds of staff in a bank on a new UI could seriously undermine the benefits of moving to an open system.
3. Wrong messaging. A quick glance at their marketing collateral would show that most vendors of open systems use cost reduction and innovation as the key go to market themes to push for legacy transformation. This messaging ignores two realities: (a) Despite incurring the high costs of maintaining legacy systems, financial services is the most profitable sector in FORTUNE 500. (b) With whatever systems they have, banks have proved their innovativeness by launching ARM, CDO, CDO2, CDS, MBS and a slew of highly innovative structured financial products that have made a lot of money for them (even if they haven't proved as lucrative for their buyers or the rest of the economy, but that's another story). Besides, and I've heard C-level bank executives say this, retail and commercial banking are fairly simple businesses that don't need to be overcomplicated by innovation for its own sake. Therefore, neither cost reduction nor innovation is powerful enough a message at the C-Suite of large banks for driving legacy transformation.

As a result, legacy transformation is fraught with a lot of as-yet unsurmountable risks.

Meanwhile, mainframe sales keep growing.

https://twitter.com/GTM360/statuses/344099747205877760

To achieve greater success in persuading top management of banks to ditch their legacy applications and embrace open systems, technology vendors need to address the above issues. Endorsing Steve Blank's "21st Century Bill of Consumer Product Rights" could be a good starting point.