These days the customer experience is perhaps the single most important element of success in business. So when the same technology that is supposed to propel the business forward creates a rift between a company and its customers, you’ve got a serious problem. Nowhere are the stakes for customer service higher than in financial services, and the price of failure in this area can be severe, as the Financial Times’ Martin Arnold and Tom Braithwaite recently pointed out in an article highlighting the effects of a recent service outage.

For financial services companies, particularly banks, customer service is quickly becoming the primary differentiator between one company and another. As has been recently pointed out, niche players are nipping at the heels of banks by providing unbundled services that sometimes surpass what banks can provide in terms of simplicity and quality. It is also noted, however, that customers still see value in the integrated, relationship-based solutions that banks can provide. In other words, if financial services firms can deliver on the customer relationship front, they can avoid being put out to pasture by niche service providers.

With public trust in banks at a low point, companies need every advantage that they can get from technology. What too many of them have, however, is an IT back-end that is too big and complex to manage, where the cost of merely maintaining it can eat three quarters of the total IT budget, according to Celent Research. As Arnold and Braithwaite point out, many of these systems have been evolved in a haphazard manner over decades through myriad acquisitions and other changes, into something of a monster.

According to an anonymous source at a major U.S. bank quoted, the aging back-end at many banks is creating a sort of “technical debt” that accumulates over time. If that isn’t disturbing enough, the source indicates that this technical debt could potentially be collected at any moment, with one event causing “the whole thing to fall down.” Not the least of the factors of concern are those related to security. How do you secure a system that’s so big and complex that no single person or department really fully understands it? Most likely it’ll have some serious vulnerabilities. This is ironic, as security concerns are often cited as the reason for not going to the cloud. Yet, as Ron Miller recently pointed out, the most infamous of recent security breaches occurred within on-premise infrastructures.

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