Identifying The Challenges of Modernising Financial Systems Amidst Regulatory Pressures

In today’s rapidly evolving financial landscape, institutions face significant challenges in keeping their systems current with the latest technologies. Cybersecurity threats like ransomware attacks make it imperative to update systems and leverage cutting-edge innovative platforms. Regulators are introducing new mandates to protect the financial ecosystem and participants’ rights. Upgrading and migrating systems—including complex database migrations—is a daunting task fraught with risk and complexity. Concurrently, stringent regulations such as the EU’s Digital Operational Resilience Act (DORA), the Network and Information Security Directive (NIS2), and the UK’s Operational Resilience Framework demand enhanced resilience and security compliance.

Why Modernisation and Compliance Matter

Failure to modernise and comply with regulatory standards can lead to:

  • Spiralling Costs: Increased operational expenses due to outdated systems.

  • Inefficiency: Reduced productivity stemming from ineffective and legacy technologies.

  • Attrition: Loss of key talent frustrated by inefficient systems.

  • Financial Penalties: Fines and litigation resulting from non-compliance.

  • Reputational Damage: Erosion of client trust and heightened regulatory scrutiny.