Legacy technology is delivering, so proceed with caution when replacing it, says transformation expert

HSBC Asset Management's chief transformation officer says while embracing new technologies it is important to remember that legacy technology is there for a reason and people are comfortable with is.

By Jonathan Watkins

The chief transformation officer at HSBC Asset Management believes the replacement of legacy technology needs to be carefully considered, with new solutions promising greater efficiencies and cost savings.

Speaking at the InvestOps conference in London, Vikram Aaditya, highlighted that legacy technology needs to be treated with care. “Any asset manager who has been there for some time like us will have legacy infrastructure,” said Aaditya. “Therefore, a key focus for all of us has to be about how we address the legacy, how we move forward and make ourselves more efficient. At the same time, we need to ensure that we don’t fall over, because at the end of the day legacy technology is delivering something and we can’t change so quickly that we stop delivering.

“It is about integration. It is about acceptance by the people. It is a reality that people are very comfortable with legacy technology. We know it works, and maybe it’s not scalable but it does what we need today. Therefore we need to take people with us on this journey.”

The challenges large asset managers face when implementing new technologies within their organisations has been a constant theme, similar to that of the sell-side. Speaking at the same event, Schroders COO, John Marsland, said such changes are harder to implement with a huge infrastructure.

Aaditya added, however, that new technologies and solutions provide an opportunity for asset managers to reform certain parts of the business. “Replacing legacy is not just doing a like-for-like,” he commented. “I think it’s a great opportunity to revisit and re-think the operating model as well. That becomes a key driver of a lot of the benefits. People are not just saying ‘I’ll get a platform that does the same thing’ but something better to allow them to meet client demands in a better way.”

The difficulties in pitching for technology budgets have been discussed on multiple panels during the event with one participant saying they are “fighting for every dollar”.

Geoff Galbraith, COO, MAN Group said arguing for ops budget was the ‘most difficult part’ of his job. He advised that with technology and transformational pitches that its best to explain things concisely: “Trying to get budget at the top table requires an impactful message, which often means breaking things down into digestible pieces.”