Though the benefits of first-mover advantage are lauded in business school, the drawbacks to this as they relate to implementing computing services are now being felt in force in industries that were quick to adopt early computing solutions to ease the processing of their workloads. Foremost among these are banks, many of which have IT platforms comprised of intricately designed and terrifyingly fragile shims used to force generations of mutually incompatible legacy systems to interact with each other.
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As creeping software rot reduces the viability of these systems, the need to transition to modern platforms becomes increasingly pressing. UK software firm Thought Machine has introduced Vault, which it touts as a “cloud native modern alternative to the legacy platforms that plague the banking industry.” Thought Machine is partnering with IBM Services as the “global preferred implementation partner” for the banking platform, with Lloyds Banking Group named as the first customer to implement Vault under the guidance of both firms.
According to a press release, “Thought Machine’s Vault is a cloud native core banking system which allows banks to fully realise the benefits of IBM Cloud. The system has been developed to be highly flexible, giving banks the ability to quickly add new products, accommodate shifts in a bank’s strategy or react to external changes in the market. With complete flexibility in the products, operating model and user interfaces, Vault can connect to both customer applications and the internal applications that bank staff use to run the bank.”
Vault uses Smart Contracts to track transaction data. As part of the partnership with Thought Machine, IBM is assembling a team based in London to assist clients in transition.
IBM’s involvement in transitioning banks off of legacy platforms is equal parts appropriate and ironic, considering the company’s previous core business of selling computers to financial institutions. Likewise, IBM’s ill-fated OS/2 platform continues to be used in certain corners of the finance industry, giving it an officially-sanctioned second life.
The big takeaways for tech leaders:
- Thought Machine is partnering with IBM to implement the Vault banking platform for financial institutions.
- Banks are facing a reckoning as software rot degrades the performance of existing legacy platforms.