The expertise acquired on the logics and functionalities present in legacy finance systems is the critical success variable for a smooth digital transition. Paolo Confessore, Head of Architecture & Strategic Innovation at ReActive, shares his insights on possible evolutions for banking and financial companies.

“Digitalization is giving a decisive turn to the finance industry, outlining new horizons of efficiency, innovation, and personalization of services. The adoption of cloud technologies plays a leading role in this transformation, no longer seen as a simple transition of technological infrastructure, but as an enabler of an open and flexible business model. Cloud facilitates innovation and agility, optimizing time to market and realizing that open finance translates into a fully integrated and collaborative operating ecosystem. Starting with a broad reading of the scenario before delving into the technicalities, Paolo Confessore, Head of Architecture & Strategic Innovation at ReActive (Almaviva Group), offers this perspective on the sidelines of the Payments Exhibition, highlighting the experience of a company and a Group that, in recent years, have been one of the drivers of the digital transformation of Italian enterprises, starting with the banking and financial world.

Confessore, how is digitalization transforming the finance industry in relation to the main challenges the sector is facing?

Addressing the transition to an open finance model requires a new strategic orientation, which goes beyond the mere adoption of new technologies. It involves redefining service delivery methods to simplify integration and ensure interoperability of all involved ecosystems. In this context, additional challenges such as data security and privacy become critically important within open and distributed architectures, where regulatory compliance becomes increasingly complex and multifaceted. Consider the recent introduction of the DORA regulation, aimed at strengthening the digital operational resilience of the finance industry with a holistic and rigorous approach to IT risk management, data security, and system resilience.

Given these challenges, what strategies are you adopting to modernize legacy systems and ensure an effective transition to innovative and digitally-oriented operational models for the finance industry?

ReActive's modernization strategy is based on the functional expertise of banking processes developed over decades of field experience and on a standardized approach supported by advanced automation mechanisms that enhance productivity and scalability. The distinctive element of our finance industry modernization projects is the quality and depth of knowledge our functional analysts and developers have of the 'as is' state. This allows us to guide the transition to the 'to be' state, effectively coordinating all interactions and implementing solutions that optimize business macro-processes. We believe that fully understanding the logic and functionalities present—even if sometimes not immediately evident—in legacy finance systems is the critical success factor and fundamental element to ensure a smooth digital transition without impacting operational continuity.

What are the most functional technologies for these objectives?

In this context, we have introduced Generative Artificial Intelligence to overcome the limitations of traditional automatic translation systems and significantly accelerate the transformation process. Generative AI, through Retrieval-Augmented Generation (RAG), allows us to analyze, interpret, and utilize information to produce and/or adapt code more accurately and in line with modernization needs. Additionally, through collaboration with leading IT partners, we maintain a critical and up-to-date view of the reference market. This enables us to select the best offerings from various technologies and manage the end-to-end process with high internal expertise. This approach not only ensures reduced timelines but also preserves the functional integrity of the final applications while introducing them into advanced technological contexts.

Sustainability is becoming another imperative in the finance sector. How can technology help the finance industry integrate ESG criteria?

A fundamental aspect of the technological evolution in finance is the adoption of green IT and green cloud practices, which are part of a sustainable digital transformation. In our vision, integrating ESG criteria permeates the entire digital transformation journey of the finance industry. Energy efficiency can be improved, and the carbon footprint reduced by adopting greener cloud solutions and measuring the impact of the services involved in the target infrastructure. Our modernization methodology, as mentioned above, not only focuses on transforming legacy systems into modern and innovative architectural contexts but also considers integrating sustainability elements from the early stages of the process as crucial. By closely and continuously monitoring green indices throughout all phases (legacy transformation, target infrastructure definition, service delivery), we ensure that every aspect is compliant with the required ESG standards. This approach not only improves energy efficiency and reduces operational costs but also offers the finance industry the opportunity to achieve sustainability best practices in any modernization and/or digital transformation process of their operations.