Cutting Loose. How to free yourself from legacy technology and escape the cycle of tech debt

10 November 2022

Legacy SystemsMindful OfproductivityProfitabilityStrategyTechnologyWealthTech Matters

Expert: Agustin Collazo Facilitator: Stephen Wall


  1. Most companies hold on to legacy IT systems purely for the data - moving it is often avoided because it is costly and time-consuming
  2. The level of data analysis that needs to be completed when assessing tech debt - and demonstrating this back to the different personas in the business (those without the technical nous) is a core challenge and can lead to a lack of buy-in
  3. There is a cost of doing nothing. The broader cost perspective becomes a shackle, and other constraints on key strategic decisions stem from tech debt
  4. The first step is knowing what your objectives are in order to understand and define what the extent of the debt is
  5. The next step is understanding what the strategy is and whether the tech debt will constrain what your firm is trying to achieve


From a strategic standpoint, we need to focus our view on the particular processes that are slowing us down and understand the cost and size of the problem when the system isn’t fitting.

When it comes to the architecture, lack of integration and flexibility is a very common situation to be in, which makes it hard to adapt when it comes to achieving profitability at scale.  scalability.

The legacy model is made up of an ecosystem of different products and joining these together is a challenge. As other companies come on board you get capability creep - suddenly you look at your architecture in a different way and see that you can buy one tool which will do many of the capabilities.

There will never be one tool which does it all so open architecture is key as well as knowing how your architecture and tools support your strategy. If you don’t know your strategy then you focus on the short-term objectives, and before you know it, you are far from where you want to be.

We hear the number of manual workarounds caused by being too reliant on a particular technology - building in operational pain which isn’t only legacy based.

The risk to the customer experience is an added concern which is why we often nudge towards the target model by adding things in, but this makes the legacy worse and more embedded, as well as paying for what we don’t actually use.

The challenge comes down to change management - the struggle people have to adapt to new ways of working in wealth management. You can invest money and resources into new systems but people don’t use them as you expect, as there is no strategy behind the change management.

The problem of the size of what you want to deliver and the issue of legacy debt can be so big that you have to paper over the cracks. Adding to it when have to react to new regulations such as the Consumer Duty or new data model for example. Where do you draw a line and at what point is it too much of a debt that you stop embedding and build alongside a brand-new system?

You have the CFO who is strict on what we are trying to do, the CEOs driving where they want to get to with the strategy, and us at the operation level dealing with what the markets are doing. The business cases stack up.

Sometimes getting the most bang for your buck is not removing an entire legacy system but putting in a transformation that will make a big difference. The new elements are more driven around customer experience, which we often just add on top.

Data-led customer experience is key given the markets, which means having difficult conversations with clients all the time. If you have a legacy system which means you can’t deliver a data-led or a compliant experience, you will have challenges.

Rather than focus on tech and data, explain it in terms of your colleagues, users and clients and the impact it has on your business. This will enable for buy-in as far more tangible and relevant to their own experiences.

We are all trying to increase profitability and reduce risk - this gets forgotten about in a lot of conversations. The strategy is building at scale or scaling profitably rather than reducing costs, but getting people engaged into these drivers is often only half the focus.

There is no shortage of data, you just need to know what and how you want to use it - and don’t collect or store it in the wrong place. The more legacy the system, the worse the data model is compared to how you want it to be, which prevents you moving forward. Sometimes the legacy data system is blamed for legacy or data issues.

The changing landscape - the system isn’t always the problem but was implemented at a time when we had different priorities. The world is moving faster, there is more complexity, more regulatory oversight and clients are more demanding with the fee models they want.

Data underpins innovation, how you make the best decisions when it comes to innovating, poor data and data siloes lead to security issues.

How do you ensure a culture of agility? There is new tech all the time, upgrades, M&A, market moments - and managing the tech debt. Some people build around it and solve problems more tactically.

In order to effectively assess infrastructure technical debt, look beyond the specific elements of the infrastructure to assess the impact on the benefits, costs and risks.

Assessing risk of technical debt using a risk management framework is the only way to make sure the business prioritises technical debt alongside the other value-add items. If you start saving money, that immediately gets the CFO on side.

In order to leverage the tech, you have already with your current vendor – so the tech evolves with how the business is evolving, the vendor needs to know your roadmap.

Quite often we expect the tech to adapt to our current way of doing things, as opposed to bringing in a system that does something much more efficiently. Not being prepared to change our process because it’s ‘not the way we do things’. But isn’t that the whole point of bringing the system?

The culture and adoption challenge comes down to making the changes easy to use - taking the mundane processes away – but these are often the hardest to implement.

We want to bring something in that helps us work better with our current way of working. The ‘adopt not adapt’ principle is usually from hard-won experience. If people are going for something new that is expected to solve all problems, then often the costs of implementation overruns.

When you change a system, it opens up the opportunity to do things a different way and the cost of operational change is often not recognised or accepted. Need the clarity that the project is not just changing the technology but is much bigger than that, it concerns roles and what the adviser does and doesn’t do.

Kicking against the change is natural - people can see a threat from not being integrated and taking some of the value away from the adviser, even if they can rationally understand it is the right thing to do.

It’s a lot easier to align the individual adviser to what you can do for them, to get them on board and engage. The hours they spend with clients, and the other parts that currently take forever to do - taking this off their plate if they do this seems to work better to keep them engaged.

Key takeaways:

  • A lack of strategy is keeping businesses tactical
  • Technology isn’t the only limiting factor, it can also be people and their long-help perspectives of habits
  • Increasing productivity is a key benefit of getting away from legacy systems, not just reducing the costs but also bringing more revenue and AUM to the firm
  • Making sure everyone in the business is aligned to that strategy - and there is a road map which ties into that overarching strategy - is key so that all are going towards the same goal
  • The emphasis on the client lifecycle management piece will be a key factor in attracting and retaining talent
  • An evolution comes with the change but this takes a leap of faith as well as belief in the outcomes from the business case