Managed Evolution of a Legacy Core Banking System: Case Study from a European Bank

Abstract

Legacy systems continue to remain crucial for the core business operations of most financial service providers around the globe. However, increasing operational risk due to knowledge loss and lack of skills because of demographic change, rising maintenance and run costs, as well as changing business requirements, put organizations under pressure to modernize them. By applying the case study research methodology, this paper derives the core elements of a socio-technical system design methodology for the stepwise managed evolution of a large, mainframe-based and historically grown legacy application. It demonstrates why this approach could be superior to frequently favored "lift-and-shift" or replace strategies, with respect to cost efficiency, risk mitigation and solution quality. In addition, a system architecture and implementation strategy are proposed and evaluated to demonstrate, how this is achieved