In a world where AI rewards those who understand their data and their history, banks have the opportunity to turn their past into their greatest advantage
One of the biggest problems of traditional banking is its inability to innovate at the pace demanded by the market. Institutions may have access to talent, capital, infrastructure, but they are still limited by legacy systems. The paradox is that what was once seen as a burden can now be an advantage.
An article by IBS Intelligence indicates that 55% of banks believe that legacy systems are the biggest obstacle to achieving their digital transformation goals.
It is true that legacy systems make it difficult for banks to innovate, because they are fragmented, do not communicate with each other and require constant maintenance. Still, they are a hidden goldmine, with millions of transactions, structured data, consistent categories, and historical behaviors.
Along these lines, legacy systems (as they are also known) have an accumulation of data and history of the business and its products that fintechs are just beginning to build. That background gives them traceability, regulatory stability, and a foundation on which to deploy AI solutions, without starting from scratch.
How to transform it into an advantage?
The strategy should not be the replacement of everything old, but the construction around the legacy: connecting through APIs, rules engines, business layers that are supported by AI, BPM or RPA, maintaining what already works, but enriching it.
Legacy can be an advantage in this era of artificial intelligence, as long as implementations are led by specialists who understand the complexity of banking systems and know how to integrate the new with what already works. Today’s technology allows us to connect without replacing, and for this reason, the history and accumulated data of the institution become the ideal fuel to innovate efficiently.
Financial institutions that adopt this approach will be able to free up resources, reduce operational risks, improve time-to-market, and develop hyper-vertical products that are more responsive to timely customer demand.
“Legacy revenge” redefines innovation: it’s not about destroying what works, but about reconnecting it with intelligence. In a world where AI rewards those who understand their data and history, banks finally have the opportunity to transform their past into their greatest advantage.
*By Julián Colombo, CEO of N5
N5 can turn your legacy systems into a springboard for innovation.
