Technical debt VS innovation: How to win at both

Mark Reef, Head of Service Delivery at Amdocs discusses the impact of technical debt on financial services and offers strategies to manage it while driving innovation.

Author Image

Mark Reef, Head of Service Delivery, Amdocs


30 Jan 2025

Technical debt VS innovation: How to win at both

Layout canvas

Ever-increasing costs of technical debt

A recent article from McKinsey & Company highlights one of the most frustrating aspects of IT spending for financial services institutions (FSIs): Ever-increasing technical debt – the cost of maintaining older, complex systems and delayed technology updates – is “stealing” resources earmarked for innovation and customer experience. And while FSIs are hiring highly skilled IT specialists to create differentiated experiences that attract those resources are being forced to divert too much of their time to resolving issues related to technical debt.

Tackle technical debt proactively

When it comes to large enterprises, some technical debt is inevitable. FSIs in particular, burdened by resource and time constraints, can easily fall behind on platform updates and upgrades. In many cases, trade-offs make perfect sense. When the business spots an opportunity to win or retain customers with a new feature, speed considerations override worries about accruing technical debt. You need that revenue-boosting feature in weeks, not the months it might take to complete an upgrade. The business is happy to support investments in new functionality but not platform updates. But one missed upgrade or incomplete remediation exercise quickly evolves into several – and the debt grows with each new feature built on the old technology.

Like all debt, technical debt eventually has to be paid. The sooner and more efficiently it’s addressed, the less you’ll pay. You can also reduce the cost of that debt by removing it from the workflows of high-cost specialists. Plus, if every development team tries to resolve issues in their own way, you’ll have inconsistent fixes, some of which may be inefficient or flawed. Instead, establish a team and a process dedicated to managing, prioritizing, and resolving technical debt. That team can also determine the best strategy for addressing similar issues, bringing consistency to the process and your systems.

When technical debt impedes delivery of new functionality, the fastest solution may seem to be to address both with the same resources. However, that is at the root of why technical debt limits returns on investments in sought-after IT specialists. Assign the remediation to the centralized team dedicated to resolving technical debt, who’ll be able to address the issues faster – and thanks to their standards-based approach, more consistently. You’ll need close coordination between the innovation and remediation workstreams and you should rely on modern DevOps processes for managing the flow of code between teams to avoid significantly slowing delivery of remediation or new features to production.

Global bank ends remediation backlog

A global bank made keeping up with FinTechs and traditional competitors a priority for its IT teams. When necessary, high-cost resources resolved problems before returning to feature development. The process worked – until it didn’t. Eventually, the bank’s vulnerabilities backlog grew so large that it would have taken about two years to address with its established processes. Technical debt also became a drag on the customer experience, with slow load times plaguing the bank’s mobile app. Faced with this ever-growing problem, the bank struggled to keep pace even after assigning highly paid mobile developers to help with routine remediation.

That’s when the bank turned to Amdocs for a fast, cost-effective solution that addressed immediate needs and prevented the introduction of vulnerabilities in the future. Our team established a remediation factory to address the multi-year backlog. The factory approach standardized the remediation process, with factory teams using consistent strategies to address similar issues. In about three months, the team worked through the vulnerabilities backlog, resolving a significant amount of technical debt. Then, the factory began addressing vulnerabilities in real time. In parallel, another Amdocs team tackled the app-related technical debt while establishing faster, more efficient workflows. The formerly sluggish mobile app soon loaded 90% faster, with customers enjoying faster access to features, and more efficient processes empowering the bank to dramatically increase the number of annual releases.

Let’s modernize financial services

At Amdocs, we work with banks and other FSIs to break them free from legacy constraints and technical debt, helping them modernize their services and drive growth through innovation. To date, our teams have helped over 50 FSIs bridge gaps between technology and business goals.

What’s your vision for the future of financial services? Talk to us about how you can escape technical debt, modernize mainframes, and win with GenAI. 

Related Insights

WHY STOP
AT AVERAGE?

make it
amazing

Your future looks
breath-taking from here

cloud

Embrace the cloud and together we’ll see your business agility, innovation and scalability soar to new heights.

Simplify the complex,
deliver the brilliant

automation

Discover the streamlined, cost-efficient and intelligent answer to increasingly complex customer, IT and network demands.

\
Fill your customers’ day
with content they love

media

Build an irresistible content proposition and experience that keeps your customers coming back for more.

Reinvent the customer
experience. Every day.

digital

Discover the agility to deliver a jaw-dropping digital experience that always exceeds expectations.

Make today’s impossible
tomorrow’s possible

5G

Unlock the full potential of 5G and shape the network to create new capabilities, unique business models and game-changing opportunities.

Explore

about Amdocs

Discover how Amdocs can help your business.

cloud

Your future looks breath-taking from here.

automation

Simplify the complex, deliver the brilliant.

media

Fill your customers’ day with content they love.

digital

Reinvent the customer experience. Every day.

5G

Make today’s impossible tomorrow’s possible.

Close