The recently announced merger between BB&T and SunTrust is all about achieving scale in order to compete, something that is often driven by technological innovation.
According to the The Wall Street Journal:
“Regional lenders are struggling to compete with big national banks such as JPMorgan Chase & Co. and Bank of America Corp, which are attracting a greater share of new checking accounts from customers that are drawn to their digital offerings.”
“Technology was the main impetus for the deal,” executives for BB&T and SunTrust said Thursday. “Pooling their resources will allow the companies to develop better digital offerings together than they could on their own, making the combined bank more attractive to potential customers.”
Ninety of the top 100 banks, including BB&T, SunTrust, JP Morgan, and Bank of America, still use mainframe-based systems as the system of record. Mainframes process three trillion dollars in transactions per day and process more transactions than Google and Twitter combined. Yet, a few years ago mainframes and legacy systems were second tier conversations. Today they are CEO and board level conversations, as executives struggle to drive innovation.
According to The Atlanta Journal Constitution:
“I think it is clear that the combined company can do more than we can alone,” SunTrust Chairman and CEO William Rogers Jr. told analysts, adding the bank is “relentlessly focused on the client.”
“The merger is being driven by the need for SunTrust and BB&T to innovate,” said BB&T Chairman and CEO Kelly King.
“We’re finding the consumer is demanding real-time satisfaction, they want what they want, where they want it, exactly when they want it,” King said.
Often, the knee-jerk reaction when innovating is to rip and replace. To jettison the old systems and put in something modern. But this is not a viable solution when it comes to mainframes. According to The Wall Street Journal, no major bank has ever replaced their mainframe. Even if you could successfully replace it, the process would take years, if not decades to complete. Meanwhile competition moves on.
The answer is to transform your mainframe from an obstacle to an enabler of innovation. You do that by creating what IDC calls the connected mainframe. Put a digital wrapper around the legacy systems and innovate faster.
GT Software’s Ivory Service Architect is the solution. We enable companies to create APIs for the connected mainframe five to ten times faster than any other approach. Let us show you how.
Steve Hassett is President of GT Software. Hassett previously held roles as an M&A advisor, a corporate development executive with Verint Systems and Sage Group plc, and ran a new ventures group for The Weather Channel. Before that, he was CEO of iTendant, a SaaS and mobile software company he co-founded in 2000. Steve is also the inventor of U.S. Patent 9,378,515, which deals with the availability of mobile content based on a user’s location and the time of transmission.