The reasons why a financial institution might want to start a re-platforming project are numerous and highly specific to the organization's context. In general, financial institutions face various outside forces pushing ever increasing obligations. In this short article, we elaborate on the main 6 drivers for re-platforming that Projective Group identified.
In the past years we have seen a continuous flow of new regulations, impacting the financial sector in positive and challenging ways. With their introduction come new requirements. Some of these can have a serious impact on an organization's technological architecture. It's not uncommon that the existing tech stack is incapable of incorporating new requirements. Take the new instant payments regulation for example. Challenging for banks as they are now required to process both single and bulk payments within seconds, which is a significant change from the way of working these banks have supported for years. The introduction of this regulation pushes an entirely new product, processing and workflow ability. All integrated in an existing tech and process architecture.
Software vendors may discontinue support for specific versions, products, or individual modules to focus on newer or more profitable offerings. A prevailing trend is the push for customers to migrate from on‑premise solutions to cloud‑based platforms. This can force financial institutions into a renewed market evaluation and may ultimately lead to a transition to another vendor. Even when a full phase‑out is still years away, vendors typically scale back development well in advance and limit their efforts to meeting minimum contractual obligations. As a result, continuing to rely on the software until end‑of‑support often becomes increasingly unattractive and can introduce operational risk.
Technological developments are following each other rapidly and are gaining traction in a wide variety of sectors. Technological advancements in blockchain, tokenization and AI offer seemingly endless opportunities. To properly make use of these, a modern technological infrastructure is a must and can therefore be an important reason to re-platform parts of your infrastructure. Think of it like trying to make WhatsApp work on your old analog phone instead of a modern mobile phone. This is a highly practical, user‑centric example that reflects a recurring challenge we observe among our clients. Many invest heavily in innovation initiatives, only to discover at a later stage that the solutions do not integrate seamlessly or harmonize with their existing IT landscape and operational processes. Consequently, the potential benefits of newer technologies, including enhanced scalability, availability, cost efficiency, and security, remain unrealized.
Keep in mind that while some technological advancements are applicable to an isolated part of the architecture, we usually see that changes in one area will also impact other parts. To provide the required functionality, financial institutions have created intricate webs of technological interconnections. Referring back to the instant payments example, the bank may now also face new performance challenges in terms of fraud and sanction screening.
Often, FI's are confronted with operational risks that lie outside their risk appetite, or those that are highlighted by an internal or external auditor. More often than you might think operational risk is a big driver for IT and organizational change because it exposes weaknesses in processes, systems, and people that can have major financial, reputational, or regulatory consequences.
In an ever-changing market, financial institutions are forced to change their product offering to stay competitive. Customers nowadays are more mobile than a decade ago and more likely to switch. Old legacy software is, however, not very flexible. The monolithic approach is far less suited to quick pivots and go-lives that financial institutions nowadays require to keep customers satisfied. This is one field where modern and modular software packages outshine their legacy counterparts.
With global tensions rising and the increasing desire for more national independence, you can imagine that societal developments can have a strong influence on an organization’s chosen course. One obvious example being the near total dependence on US giants like Amazon and Google for cloud services which is increasingly being seen as undesirable.
Issues can arise in other ways too. While the number of successful fraud cases is stable or even decreasing because of security measures like SCA, the complexity of fraud attempts is increasing. To ensure the safety of customers, banks are forced to either develop or implement robust fraud prevention tools. Introducing such new capabilities in an existing landscape asks for re-platforming.
ProjectiveGroup has extensive experience with re-platforming and can help your organization during any of the phases of a change project.
Established in 2006, Projective Group is a leading financial services consultancy.
We are recognised across the European industry for turning complex challenges and emerging themes into clear, pragmatic solutions. With deep roots and trusted relationships in financial services, we bring hands-on expertise across key domains. We support the full journey of change: shaping strategy, delivering complex transformation or building long‑term capability through managed services, staffing and training. Our purpose is simple: to empower financial services to shape the future of wellbeing, prosperity, and innovation.
