In the 1980s, forward-thinking bankers began to transform their businesses using computer technology. They networked ATMs to their central systems, making it possible to give customers real-time balance information and withdraw cash. For the first time, customers could zoom up to a “Johnny Cash” machine and make a withdrawal without having to line up at the teller. It was a game changer.
The systems that drove these innovations were built on mainframes. For the most part, they were designed to do a few things really well: processing checks, loans or deposits. But soon it became obvious that more systems were required to get the job done, so another system was set up. And then another. And then, expensive consultants were flown in to help ensure the systems could work together. They recommended complex middleware to solve the problem, so they developed that system too.
Pretty soon, new words began appearing in the vernacular: spaghetti code, technical debt and so-called “frankensystems.” Frankensystems are old, incompatible systems that have been bolted together to look reliable. But don’t be fooled; They are scary and unstable, and no one really knows how to control them. Frankensystems are a nightmare for your team, your customers and your bottom line.
In the past, the financial sector was a driving force in technological innovation. But that was then. Today, many financial companies are running on outdated, incompatible systems, bolted together with millions of lines of code, that no one currently working with them in company really understands.
Frankensystems are scary and unstable, and no one really knows how to control them, although countless financial companies still rely on them every day.
Frankensystems are a problem if you are fighting for market share against newer companies that compete on the basis of agility, innovation, cost reduction, better user experience or greater ability to use data. Frankensystems are scary because, when you try to modernize your code at one end of the system, there is no way to predict how the rest of the system will respond — and that makes them unstable.
When a customer service rep says, “Sorry our system is down right now,” chances are they have a frankensystem lurking in the basement. When systems don’t allow consumers to change their monthly payments, chances are their lender is working off a frankensystem.
Internal teams have to go to battle with frankensystems every day just to get things done. That’s why some departments have such high turnover. Young employees would rather move on than work with a black screen. Interfacing with these systems have made the customer experience scary too, which is great news for the competition.
So why do companies keep frankensystems alive? Especially when the upside to modernizing is increased efficiency, stability and flexibility, as well as skyrocketing employee productivity and morale?
In our experience, the answer is unusually fear — fear of the unknown and fear of the complexity of change. But the world is becoming more virtual, more on-demand and more mobile every day. Frankensystems will never meet the challenges and opportunities of remote work, big data, automation and business model innovation. It’s time to retire the frankensystems.
The harsh reality is that the only thing scarier than retiring a frankensystem is allowing it to continue to run amok in a business.
Vlad Kovacevic is the founder and CTO of Inovatec Systems. JAVELIN by Inovatec is a state-of-the-art lending platform that provides lenders with efficiency, stability and flexibility.