Financial Industry Digital Transformation: 3 Ways TPSM Can Help

Three strategies to set banks and investment firms up for innovation and modernization.

You’ve probably heard the criticisms of the financial industry’s digital transformation outlook. But as most industry insiders will tell you, almost all the supposed downsides, including continued reliance on mainframes and anemic cloud adoption rates, exist for a reason — they’re good for customers, businesses, and the economy alike.

This is not an industry that tolerates unnecessary risk. Its technological systems are heavily regulated and unbelievably complex, not to mention under constant use. In a very real sense, they’re the crux point of the global economy. In an environment where mere seconds of downtime or a breach of new systems can wreak financial, career, and reputational havoc, you can hardly fault an individual business or the industry at large for choosing to keep what it has.

Lack of rapid modernization is not the same as stagnation. The same pragmatism that makes finance’s stakeholders question a feet-first leap into every new upgrade also creates the achievable need to adapt current infrastructure to modern needs. And increasingly, that mindset has led the field toward third-party software maintenance (TPSM), which is an objective-based independent support model that enables companies to successfully support and secure their existing software years into the future.

Here are three ways institutions in fields like banking and finance can take control of digital transformation initiatives by keeping what they have with the added assistance of a TPSM provider.

TPSM advantage 1: More runway for ongoing financial industry digital transformation

It’s not that financial institutions reject new technology out of hand. They just need to be more discerning with what they implement. Comparatively slow cloud adoption rates are one example. Planning to bring workloads into a public cloud environment can bring multiple layers of planning, legal consideration, and implementation that businesses in other fields simply don’t have to shoulder.

Because of this, every step of a modernization or transformation project tends to be more extensive, from planning to final implementation. This also can lead to complications that appear to be unavoidable without highly specific product knowledge in place. In the case of financial industry software, solutions going to end of support (EOS) status before the plan rolls out can be troublesome because these solutions typically need competent support and IBM® software security to meet stringent regulatory requirements.

Whether you know exactly how long you’ll need the software or not, the ability to keep your infrastructure moving and compliantly secure without updating versions or extending OEM service contracts can hold many benefits for most financial companies.

TPSM providers help by providing support and maintenance services that retain any version the customer is entitled to secure and compliant. Depending on context, that could mean keeping the estate moving while the organization plans its next steps or providing the service indefinitely while the rest of the infrastructure modernizes. It can even lead to legacy software estates getting new functionality to help with background needs like data filtering.

TPSM advantage 2: A more objective outlook

Due to their business models, software vendors can be inclined to lock customers into upgrade cycles and longer contracts, even if that’s not the best move forward for the individual buyer. Conversely, independent third-party software maintenance providers are more focused on delivering value-added services. And accordingly, their goal is helping customers do what they desire with their current technology assets. That difference is substantial in many working contexts, but especially in situations where financial institutions aren’t sure what the best move forward is or when it might need to happen.

If a version upgrade or interaction with the OEM is the best way to achieve the objective, a TPSM provider has no problem letting you know that. On the other hand, if the problems or concerns you’re encountering are better solved locally, an independent support company can assist in building a plan, acting on it, and continuing to maintain the infrastructure for as long as needed.

Having all options open instead of one prescribed path is a good start. Having the outlook and expertise to capitalize on the strengths of your current infrastructure, meanwhile, makes planning more like actual preparation – and less like working around whatever roadblocks OEM licensing and support models might throw in your company’s way.

TPSM advantage 3: Enhanced operational clarity to guide licensing challenges

The costs of a finance industry digital transformation aren’t as clearcut as seeing a deficiency, paying to fix it, and moving on. Direct and indirect costs can quickly spiral into eight figures, and the process can take years even if it goes off without a hitch.

It’s also important to note that updating current legacy software or moving from one vendor’s legacy product to a competitor’s newer alternative can trigger an IBM® software license audit that the financial institution is contractually bound to undergo.

In a sector with more legacy presence than almost any other – mainframes are still used in over 70% of Fortune 500 companies – having a solid grasp of your licensing posture in advance can save huge sums of money, not to mention a lot of trouble, if an auditor’s findings steer you toward an unwanted version upgrade or OEM support renewal.

The same objective-based support that makes TPSM a strong choice on the IT operations side can also be beneficial when preparing for a software license audit. Licensing and legal experts with years of real-world experience navigating the rather opaque waters of enterprise software licensing from the buyer’s side can offer insights and strategic outlooks that dovetail with the desired outcome and the plan to get there.

An independent TPSM provider is a highly valuable friend to have before and during the rigors of an IBM® software license audit.

Where will your digital transformation plans take you?

Whether you work on the procurement, asset management, or IT ops side, there’s a good chance your digital transformation plan isn’t as clear as you’d like it to be. Instead of giving the OEM more say in your roadmap, consider reaching out to a member of our team for a free 30-minute needs assessment. And if you’d like to see a bit more of what the TPSM model can do, review our case studies for a look at some of the victories we’ve helped Fortune 500 finance and banking companies achieve using the software they already have.

Don’t let modernization woes drag your roadmap down. Get a free consultation with our experts today.