Is Financial services IT in a mess?
A reality check
Tech Panel Whether it’s insurance or banking, those working in financial services keep coming in for a lot of stick. Over the years, many organisations have spent shed loads of money on IT, yet customers still complain about bad service, broken processes and the fact that nothing seems to be joined up. This brings the state of IT into sharp focus.
Financial services IT professionals are being pulled in all directions. New regulations have been coming in thick and fast, and there’s no end in sight. At the same time, everybody’s clamouring for ‘innovation’, insisting that improving customer service is top priority.
For many firms, all this is happening against a backdrop where legacy systems (some of them decades old) and more recent applications are held together by a complex mix of point-to-point connections and/or some kind of ‘backbone’. In some companies, it’s got so bad that a bowl of spaghetti might be mistaken for a simplified version of the systems diagram.
Needless to say, all this makes maintenance and upgrades a nightmare. And that’s before we’ve taken into account the demands for new applications, and useful reports and analysis to come out of those often fragmented and barely-held-together systems. Maybe it’s all getting too complex to handle? Then there’s the small matter of budgets. When it comes to regulatory compliance, extra money typically gets released sooner or later, even if only grudgingly. But for the rest, the refrain is “if you want to spend more, find savings somewhere else first”. That in turn can lead to corners being cut, with the almost inevitable consequence of systems outages, some of them in the full glare of publicity.
But who knows – maybe we exaggerate.
Whatever the truth, we want to find out, so if you have experience of the way technology is being used in banking, insurance and other parts of the financial services sector, or have views from another perspective then let us know in the comment box below.
Better still, if you work in the finance sector itself, tell us about the real pressures and constraints you are subject to through our latest Reg reader survey here.
Workingas a Software Developer at an investment bank...
IT management where their collective IT knowledge can just about manage a pivot table in Excel doesn't help, and egos mean people are not willing to defer decisions down to the lowly techies.
That and a lack of any budget to go towards anything resembling innovation.
I work in investment banking, development mostly and arguably the single biggest issue is lack of collaboration between teams. For example I need access to data to be able to develop.
My team does not have data available that I can use for a task but while I know other teams do, it is seemingly impossible to get IT managers to collaborate with each other so the two teams can share.
One of two things tends to happen, one is individuals that want to do the work have to also do all the leg work with getting the things they need, as in finding who in another team has access to data and, crucially, can give you access to it. These individuals will pointedly avoid getting IT management involved as they know nothing will come of it.
The other thing that happens is people re-creating the wheel by re-processing already processed data so they can use it. Then you have developers doing what is essentially infastructure work and, unsurprisingly, not doing a very good job of it. Not to mention no one else can then use it.
This is how you get the mess of unrelated, uncoordinated systems being used in an adhoc fashion with eventually production systems being reliant on them.
I tend to agree
In my Finance IT dept there was probably 40-50% of the dept that were effectively non-IT bodies - primarily in COO and business management type functions. They spent most of their time forcing meaningless reinventions/rebrandings of development methodologies and frameworks, utter wank like CMMI, and spend years inventing service catalogues that mean nothing to the business.
Add to that lots of rounds of offshoring just as the previous offshore teams have gelled, and that's what's wrong with FS IT.
Oh and shoot any coo functionary whose not involved in statutory stuff like SOX.
Recipe for Disaster
First, create a large number of highly customized systems to run your business.
Second, replace your own staff (and business knowledge) with a large outsourcing contract and boil off huge profits.
When profits run dry, remove outsourcing company and off shore work.
Cancel replacement of aging systems to give balance sheet fresh gloss
Reduce headcount by half for that extra special finish to the year
Sit back and enjoy your hard earned bonus
Which bank did you work for then? I've worked in financial services IT at major global banks and insurance comapnies for nigh on 15 years and I don't recognise a single one of your assertions. You are talking complete rubbish.