The secret failure in the banking system of migrating from COBOL
Bill Hinshaw from COBOL Cowboys:
“I just got through a conversion (for a system) to go from COBOL to Java, It’s taken them four years, and they’re still not done.”
The banking industry relies heavily on computer systems to manage transactions, customer data, and other critical functions. Many of these systems were built using the COBOL programming language, which was popular in the 1960s and 1970s. As newer programming languages and technologies have emerged, the banking industry has struggled to keep up with the pace of change.
One challenge the banking industry has faced is the difficulty of migrating away from COBOL. COBOL code is often deeply embedded in legacy systems, making it difficult to replace or update without disrupting existing operations. This has led to a situation where many banks are still using COBOL-based systems that are decades old.
One consequence of this is that it can be challenging to find developers with experience working with COBOL. As a result, banks may struggle to maintain and update their legacy systems, which can lead to reliability issues and security vulnerabilities.
Another consequence is that it can be difficult to integrate COBOL-based systems with newer technologies. For example, banks may struggle to integrate mobile banking apps or other digital services with legacy systems built on COBOL.
In recent years, there have been efforts to modernize the banking industry’s technology infrastructure. However, this is a complex process that requires significant investment and planning. Banks must carefully balance the need for modernization with the need to maintain existing systems and processes.
The failure of the banking system to migrate from COBOL is a complex issue with many factors involved. COBOL, or Common Business Oriented Language, is a programming language that was developed in the late 1950s and has been used extensively in the banking industry since then.
One of the primary reasons for the banking system’s failure to migrate from COBOL is the sheer scale of the task. Many large banks have complex legacy systems built on COBOL that have been developed and maintained over decades. These systems can be difficult to replace, and even small changes can be risky and expensive.
Additionally, many of the developers who originally built and maintained these systems have retired or moved on to other industries. As a result, there is a shortage of developers with the necessary skills and knowledge to work with COBOL.
Another factor is the risk associated with making changes to these legacy systems. These systems are often critical to the functioning of the banking system, and even small errors can have significant consequences. Banks are understandably hesitant to make changes that could potentially cause downtime or other issues.
Finally, there is also the issue of cost. Replacing or modernizing legacy systems can be expensive, and banks may be reluctant to invest in these projects without a clear return on investment.
Commonwealth Bank of Australia, for instance, replaced its core banking platform in 2012 with the help of Accenture and software company SAP SE. The job ultimately took five years and cost more than 1 billion Australian dollars ($749.9 million).
Example of a failed migration from COBOL in the banking system
TSB also lost 49.1 million pounds from financial fraud while its systems were melting down.
In April 2018, TSB Bank attempted to upgrade its computer system while simultaneously migrating a billion customer records. The upgrade did not go well and resulted in a meltdown of TSB Bank’s internet and mobile banking. Many customers were unable to access their accounts, saw wrong balances, or even saw other people’s accounts instead of their own.
The Bank was forced to migrate from a COBOL-based system in 2018 due to a buyout, the bank was unable to trade for days, the cost of the migration ended up being 330 million pounds. That was in addition to the budgeted cost for the engineering work for the actual migration. TSB also lost 49.1 million pounds from financial fraud while its systems were melting down.
Conclusion
Overall, the failure of the banking system to migrate from COBOL is a complex issue with many factors involved. It will likely require a concerted effort from the industry, government, and education sectors to address this challenge and ensure the continued stability and security of the financial system.
Links
Fail by design: Banking’s legacy of dark code — DW — 05/03/2018
What Is COBOL, and Why Do So Many Institutions Rely on It? (howtogeek.com)
Why banks can’t delay upgrading core legacy banking platforms | EY — Global
