Paving the way for new technology with application portfolio management

The article explores how financial institutions are increasing their technology budgets in 2024 to adapt to economic shifts and technological advancements, amidst concerns over bank collapses and cybersecurity threats. It introduces application portfolio management (APM) as a strategic solution to help banks innovate, optimize costs, improve efficiency, manage risks, and make informed decisions. APM is presented as a critical tool for banks aiming to lead the charge in reshaping the future of banking.

Gearing up for tech revolution in 2024

In the aftermath of a year filled with bank collapses, erratic interest rate movements, and global geopolitical tensions, financial institutions are fervently increasing their technology budgets for 2024. They're setting their sights on the horizon of emerging technologies. According to research from Arizent, an impressive three-quarters of banks and financial firms are gearing up to increase their investments in technology. This strategic pivot is in response to the relentless pressures of economic shifts and technological breakthroughs, which are steadily eroding the foundations of the once-dominant universal bank model, ushering in an era of radical specialization to meet the needs of customers.

For banks aiming to not just survive but thrive in this competitive landscape and stay one step ahead of ever-evolving cybersecurity threats, the race is on. The window to innovate – in the context of adopting new technology - is narrow. Innovation demands more than just will; it requires meticulous preparation. Data must be primed for integration, governance structures must be established to safeguard data, and a prioritized change management plan must be flawlessly executed to ensure that your investment is not wasted or compromised. And let’s not overlook C-suite consensus and the budgetary marathon—the mission for significant funding approval that can stretch on for months.

Leading the charge with Application portfolio managment (APM)

Imagine a scenario where navigating the complex landscape of technological innovation, cybersecurity threats, and data management becomes not just manageable but streamlined – and ultimately is used a guiding tool for success. This where application portfolio management steps into the spotlight, offering a strategic blueprint that might just be the golden ticket for financial giants striving to lead the charge in innovation, security, and data optimization.

Here are five ways application portfolio management can change the trajectory of your financial institution and position you as a leader in the race for innovation:

1. Strategic Alignment APM ensures that a bank's technology investments are directly aligned with its business strategy and objectives. By mapping applications to business capabilities, banks can identify and invest in technologies that drive competitive advantage, improve customer experiences, and open new revenue streams, steering the bank towards innovative growth areas.
2. Cost Optimization By identifying redundant, obsolete, or underperforming applications, APM enables banks to reduce unnecessary expenditures on maintenance and licensing fees. The savings can be redirected towards investing in emerging technologies or scaling existing solutions that contribute to innovation and growth, ensuring financial resources are allocated to areas with the highest return on investment.
3. Operational Efficiency By streamlining the application portfolio, banks can simplify their IT infrastructure, which improves operational efficiency. Behind growing deposits and loads, a recent study indicated increasing efficiency was a top priority for financial institutions. A leaner application landscape enhances performance, reduces system complexity, and minimizes the likelihood of errors or conflicts. It also facilitates easier and faster deployment of new features or updates, keeping the bank agile and responsive to market demands.
4. Risk Management and Compliance By providing a comprehensive overview of the application landscape, APM helps banks identify and mitigate potential risks associated with application performance, security vulnerabilities, and compliance issues. This proactive approach to risk management supports a more secure and compliant foundation for introducing innovative technologies and practices.
5. Improved Decision Making APM offers valuable insights into the performance, cost, and business value of each application, enabling informed decision-making regarding technology investments and disinvestments. This data-driven approach ensures that decisions about where to innovate are grounded in strategic analysis, maximizing the impact of innovation initiatives on the bank's long-term success.