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The banking world hasn’t been as dynamic as we see it today and bankers are looking at technology as an enabler to meet up with the challenges of ever changing banking industry. The current downturn has lead to banks no longer having the luxury of deep pockets, extended timelines or telling their customers to be patient while they go through a refurbishment of their systems. The world is here and now. This then is crunch time. The marketplace is demanding “more for less”. Banks need to offer more products and services than their immediate competitors, faster, cheaper and more conveniently. On top of that, the silos of banking, insurance, wealth management, mutual funds, and mortgage companies are becoming one big banking melting pot. Bankers are very adept on knowing exactly what their end customers need, but they do not really know how their technology infrastructure will support them on their customer needs. The legacy systems are good enough to “run the bank”, costly yes, but good enough, but they are no good if the need of the hour is to “change the bank”.Faced with the growing competition from the marketplace, and the need to keep up, banks and their solution providers have been forced to move away from the “big bang” change of core systems. Instead they are adopting the process of “Legacy Replacement by Installments” (LRI) which enables banks to replace specific segments of their systems in a time-bound and effective process. LRI helps banks operate their existing systems while upgrading a component. The new components based on service-oriented architecture seamlessly operate along with the older systems, thus making it time and cost-effective for the bank, and effortless for the bank’s existing customer community.To enable fast, effective LRI, we need to keep the following criteria in mind:1) The components must be SOA compatible so that their end results become paramount, measurable and congruent.2) The new system must afford express customization, as this is the key to the bank having unique offerings, and to offer products that best harness its differentiated business processes.3) The customer experience must be totally unique and give a very different comfort feel, through whatever channel the customer chooses to interact with the bank, and be equally comfortable to customers who are established, as well as those who are relatively recent additions.4) The technology should afford scalability so that the bank does not run out of capacity, as and when the product launches succeed in the marketplace.5) The system should be easy to integrate across a galaxy of disparate systems, and must work seamlessly with the existing products and services, because the bank’s goodwill does depend on the existing customer community.LRI can be looked at one of the pragmatic ways for bankers aspiring to retain and enhance their competitive edge. If drafted carefully, LRI program can a long way in helping bankers achieve the supremacy in technology. Following are some of the pointers, which can be looked upon as to increase the effectiveness of LRI : 1) The bank’s management must involve IT proactively before major business decisions are taken – not as an afterthought.2) Banks cannot afford to proliferate more silos in order to support business growth.3) Banks have to find a way out to not only rationalize applications that perform similar functionality within the organization, but also identify, isolate and reuse business logic and data that represent core business processes such as account origination and pricing.4) Banks cannot afford to hold onto applications that rely on outdated technology.5) Banks must have consistent processes across the lines of business for similar functions.6) Banks must invest in obtaining a holistic view of the customer across the product silos.7) Banks must move away from vendor lock-in situations by moving to a service-oriented architecture and standards-based interfaces.8) Banks must measure the return on additional technology investments more closely and in terms of impact on business agility and performance.Therefore, in conclusion, the banking world is no longer ready to wait more than one quarter to see the impact of its technology investments. This makes it imperative for the technology partner to enable existing technology and systems to effectively and seamlessly interact and co-exist with the new technology. The chances that partners will be able to land orders for a completely new comprehensive retail banking system are dimming by the minute. No bank can afford that type of money, the enormous disruption to existing processes and customers, or the extended time-table that such a change envisages. Legacy Replacement in Installments is a methodology that reduces the “shock effect” to the existing infrastructure, and is relatively affordable and time-efficient.