This summer I spent quite a bit of time digging into the question of how cards players are addressing the legacy challenge: dealing with the mainframe-based card management and processing systems, which are struggling to cope with the rapid growth in volume and variety of transactions, and lack flexibility in bringing new products to market. To answer this question, I conducted about 30 interviews with issuers, acquirers, processors, software vendors, IT service providers, and other industry experts, as well as some secondary research.

I began this research with the expectation to develop a few case studies about specific issuers and acquirers. However, it quickly became clear to me that capturing and telling a complete modernisation story for any large player is almost impossible. First, there is no one single individual, or even a small group of people, who can tell a complete story. Often it is difficult to define clear starting and end points of the transformation journey, and those journeys can take a long time. They can fail or change direction, and many are still in motion. In the meantime, people move and change roles. Even if there was such an individual, capturing their story would require in-depth discussions. Finally, even if they were able and willing to tell the full story, most would not want to have it published or shared with others.

However, it is possible to identify distinct approaches players deploy to address their legacy challenges. In the interviews, I identified ten main approaches which I grouped into three categories by their “attitude to legacy”, i.e., whether they aim to replace, minimise, or manage legacy. Cards players rarely rely on one approach only; many combine different approaches in different areas or at different times, depending on priorities.

While some of the approaches may seem obvious (e.g., rebuilding from scratch), I believe collectively they represent a rather comprehensive set of tools available to any financial institution faced with a legacy challenge. The report also uniquely has over 30 examples and mini case studies illustrating how cards players use these approaches to improve their situation.

Celent Banking research clients can download the report here. I am also running a webinar this week, where I will present the report findings and discuss some selected case studies. I hope many of you can join me on Wednesday, August 15 at 8 a.m. PT/ 11 a.m. ET/ 4 p.m. BST.