How Does Legacy Migration Work and Why Might Your Business Need It

Nobody likes old toys. We still want them to say the same words and do the same movements, yet we want them to look brand new and wink naturally. It is the same case with software and applications. Every company wants its apps (whether internal or external) to work efficiently, and they want them to do so forever. Unfortunately, the world of technology changes fast, and what is know-how today can become a legacy system tomorrow. Migration of such old apps is inevitable if you want to stay competitive in the market; the question is how to do it efficiently.

What is legacy migration?

Legacy stands for ‘outdated’ and ‘old.’ In terms of banking software development, this is old software or hardware that is still in use regardless of its inefficiency. Most frequently, legacy systems do not meet new technological advancements even though they still might be working fine to meet the company’s needs. An example of a legacy system is Adobe Flash Player. It has been helping to run web-based applications and software for a very long time, yet on December 31, 2020, the system gets decommissioned, and the support for it stops. As a result, any third-party applications will have to move away from this solution. This move is called legacy migration – the process of modernizing old IT systems to meet the latest market standards and requirements.

Two types of legacy migration

Traditionally, there are two types of legacy migration: lift-and-shift and business transformation, where FinTech software development companies generally opt for the latter one.

  1. The lift-and-shift method is mostly initiated by IT teams that see the need for an update or replacement of the current system. Usually increased cost of current system maintenance and its desuetude are the reasons. The lift-and-shift migration intends to copy the existing system based on new technology without changing internal processes or updating the software.
  2. The business transformation method is related to the company’s need to update its existing systems to bring more revenue, provide better customer satisfaction, stay competitive in the market, etc. As a rule, banking software companies opt exactly for the business transformation model of legacy migration since it drives innovation rather than the usage of the same legacy system on a new engine.

Business transformation may involve core or non-core legacy migration methodologies. The former involves migration of the larger systems like customer CRMs, ERPs, or the whole system digitalization. Such migration might also be related to business scaling or the need to increase performance. Non-core migration involves the update of some business parts or tools like Lotus Notes. 

Top reasons for legacy migration

Today one of the most significant numbers of legacy migration goes to financial services software companies; 86% of them state that legacy migration is inevitable and will be performed in the nearest time. However, it is essential to differentiate between the will and the need to migrate.

When might migration be an obstacle?

Sometimes migration might be unjustified; sometimes, it is the reluctance of migration that stalls the process. Here are the reasons why migration might not be obligatory:

  • Business needs are met. If your current business processes run smoothly, you have checked that the legacy system does not cause any discomfort and bears no consequences, then migration might not be obligatory. You can still consider moving to something newer and better but without the time pressure.
  • Higher cost: FinTech software development requires careful planning. Before any migration is performed, it is essential to compare the prices for running on the existing system with the cost of migration and upcoming savings. Legacy migration might be time-consuming and costly, especially without extra help from the field specialists. Careful planning always turns migration into an advantage, but a chaotic approach without guidance might bring higher costs.
  • Business disruption: Migration means a smooth transition, not an abrupt switching. So if you cannot guarantee an easy transfer, postpone the migration and get professional help. 

Top indicators for legacy migration

As a rule, the existing order of things works. Yes, it might be time-consuming and cost-ineffective, yet this is ‘how things work’ and ‘how staff got used to doing it.’ These are the most common excuses not to migrate. The truth is, yes, it works and probably will continue doing so, but the small details and inefficiencies can get really annoying, especially when it comes to security and banking software development. Here is a list of those irritations that signify the need for legacy migration:

  • A constant need to reboot a session, a system, a device
  • Complex onboarding progress with a wide range of dependencies
  • Inability or difficulties to access data whenever and wherever needed
  • Inefficient backup management
  • Failure to support remote work (especially important in the COVID-19 times)

Yes, these small obstacles can be resolved with workarounds. However, if you have 15 workarounds for a single process, this might be the time to seriously consider legacy migration. 

How can legacy migration benefit banking software companies?

All major financial institutions have already set up initiatives towards innovation. The truth is many of them would look for white label solutions or strong financial services software companies with proven effectiveness and reliable reputation. Whether you are among the companies seeking a software provider or the provider itself, here is a list of advantages legacy migration can offer to your business.

  • Cost of management. Yes, infrastructure investment takes a lot from the budget. However, using an old infrastructure for FinTech software development is like driving an old car; it still works, but with time its maintenance exceeds the overall cost. Legacy migration helps to minimize that maintenance as well as licensing fees.
  • Security. The world legacy stands for old: outdated technology, backup problems, lack of recovery plan, and old security protocols that are easy to penetrate, breach, and hack. This is an unacceptable downside of systems for all companies, and especially those in the financial sector. Legacy migration can update your security and take it to the next level, such as the cloud.
  • Poor performance. People abandon apps that load and update forever; there is no doubt here. Legacy systems store data locally, and it frequently causes extended loading time, inability to load content at all, or risks to lose the data should the servers fall. Legacy migration helps to avoid such performance issues once and for all. For instance, if everything is migrated to the cloud, your solution becomes available anywhere to anyone and at any time.
  • Compatibility and scalability. Legacy systems are hard to connect to the new services, and they are almost impossible to scale. The old technology prevents apps from connecting to the new SaaS solutions or transferring to mobile devices at ease. Considering that more than 50% of all internet traffic comes from mobile devices, scaling your solution in this direction is essential. Legacy migration can facilitate scalability and compatibility with other banking software companies considering that most are already in the cloud.
  • Upgrades. Old systems usually need downtimes for new releases, while the new infrastructure can help with continuous improvement of your solution and seamless delivery of the updated software versions.
  • Mobility. Computer software is updated so fast these days that keeping up becomes hard. Apple recently discontinued its support for 32-bit applications. The truth is, such changes happen a lot these days, and at one point, an update of the legacy system will not be sufficient to match the new requirements. Legacy migration helps to be mobile and agile in the fast-developing and rapidly changing world. New applications become accessible 24/7 without any risk of disruption on the way, which is especially important for internal apps and software solutions. 

How to build a successful legacy migration strategy?

Careful planning is the core strategy for legacy migration. Step-by-step guidance on what goes first, who is responsible for which part of the process, the timeline, and the budget can make your transition to a new system smoother and more natural. Besides the high-level planning, consider lower-lever planning, such as migration objectives, scope, limitations, new technologies, assignees, etc. Once the plan is ready, you can move on to the proper strategy execution.

  1. Define the legacy system: documentation, processes, inputs/outputs, hierarchy, dependencies, etc.
  2. Differentiate the migrating components and their order
  3. Audit the selected components (to understand whether refactoring is needed)
  4. Map the dependencies for greater efficiency
  5. Strategize and prioritize the transfer (decide which components should go first)
  6. Create a backup of the legacy system (essential during FinTech software development and migration)
  7. Automate everything possible
  8. Start the migration
  9. Revise, retest, retry all functions before switching to the migrated service

The final thought

Legacy migration is a perfect strategy whenever you feel that your system lacks efficiency, you spend too much on maintenance, and your employees work hard while delivering poor results. Nonetheless, without the right approach to migrating the existing software, this process might become an expensive nightmare without a happy ending. The FPT Team has knowledge, experience, and expertise in migrating isolated elements of a system as well as complete legacy software migration. Whether you are looking for a reliable migration partner, need some advice, or plan to outsource the migration completely, we will be happy to assist you. Contact us at any time and discuss the details of your legacy migration.


  • Ivan Soto (2017). Data Integrity Strategies for Migrating Data from Legacy Systems [Link]
  • Forbes (2020). Migrating Legacy Applications To The Cloud [Link]