Migration
Banks need to consider carefully if they have the technical capability, resources, and time to migrate seamlessly to a new vendor, and the support required from the outgoing vendor. For example, vendors often create unique, customised APIs and interfaces, deviating from industry standards. They may also possess encryption keys (which are necessary for accessing or using certain systems) and/or proprietary protocols and data formats. Delays and risk can arise where an outgoing vendor is slow or uncooperative in providing exit assistance. In some cases, migration may require the complete re-integration of the bank's systems with those of the incoming vendor.
Data
Similarly, it is important for banks to check whether they have digital copies of all their data held by the outgoing vendor. This includes, for example, customer data, bank/customer usage records and configuration settings. Disputes often arise where this data is held by an outgoing vendor (not easily accessible by the bank) and such outgoing vendor refuses to provide the data altogether or in a desirable format.
Intellectual property (IP) and confidentiality
IT systems are complex, comprising a large variety of proprietary, bespoke, and open-source code, as well as related specifications, user guides, manuals and other materials. Some materials required to effect migration may have unclear ownership, resulting in a fine line between what can be used or shared as part of a migration and what constitutes an infringement or misuse of the outgoing vendor's IP or confidential information. This is a fertile ground for disputes.
Dependencies
Banks often engage a single tech vendor for the provision of multiple different services, such as enterprise resource planning, customer relationship management and cloud services. In such cases, banks have to consider the impact of terminating one service on the remaining services. Questions to ask include: will the termination result in a reduction on volume discounts offered by the vendor for bundled products? Are there any dependencies on the terminated service? Could this affect the relationship with the vendor for the remaining services?
Hidden costs
An early exit can come with a myriad of hidden (and not so hidden) costs, including early termination fees, fees payable to the incumbent vendor for the provision of migration or exit services (such as data extraction and technical support) and costs resulting from unexpected complexities that can arise during the migration.
Business continuity
From both a reputational and regulatory perspective, it is perhaps most important that any migration does not impact a bank's ability to continue to provide its products reliably and securely to its customers.
