Industry Insights: Disruption as a way of life

Sidestepping the legacy barrier

Legacies are great in wills, especially if you’re the heir. For organizations in the midst of sweeping change, legacy technologies and practices become serious hurdles in the path to success, or even survival.

Consider the breakup of the former AT&T system if you know, or perhaps remember, its history. Once a monopoly, “Ma Bell” was eventually broken up so the marketplace could be opened up. Today’s AT&T bears little resemblance to its predecessor.

Massive waves of experimentation, change, and even failure marked the communications industry’s struggle to adapt, and the decades since have seen foundational disruption in industry after industry. Financial services is right in the middle of its own transformation.

There’s no way to know how it will all turn out.

Traditional FIs—banks and credit unions—have a (narrowing) window of opportunity to get in front of the race. Many are responding resolutely and innovatively. But all are facing multiple hurdles posed in large part by their own history of success. That is to say, by their own entrenched business models, siloed organizational structures, traditional practices, and perhaps especially their legacy technologies.

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