Britain’s banks run on computer code older than living memory – report
One of the major planks of the UK economy may be worryingly reliant on obsolete or obscure technology, according to a new study by management consultancy Baringa. The firm found that two fifths of UK banks rely on computer code written in the same decade most of the large banks’ CEOs were born. Worryingly, just under 50% of banks rely on old code which can only be understood by “just one or two people, who are at or near retirement age”. Baringa argues that these problems with legacy infrastructure and lack of skills is both a danger to banks and an impediment to the agility needed to encourage customer loyalty.
The company polled 200 bankers across the UK, all of whom were senior and had technology responsibilities. It found that 39.5% of respondents said the oldest programming code operating within their technology systems was written in the 1970s or earlier (of the CEOs of the UK’s “big five” retail banks, only one was born before the 1970s). 16% of banks ran code written in the 1960s, while 3% of respondents run code written in the 1940s.
Some of the applications underpinning the country’s banks are so old they pre-date modern computers. 19% of respondents say their earliest computer code was created for computers that ran on physical systems, such as punchcards. 15% ran code written for old mainframes – huge, room-sized machines – from the middle of the 20th century.
When asked how many people within the business have the skills and experience to work with the oldest technology used in their systems, the most frequently cited answer was “just one or two people, who are at or near retirement age”. The second-most cited answer (chosen by 31.5%) was “just one or two people, who are not at or near retirement age”. Of the 200 senior bankers polled, not one selected the “many people” option.
Paul Mihajlovic, leading banking & markets technology at Baringa, said: “Pockets of old technology is an unavoidable situation in complex technology estates. Banks are huge organisations, serving millions of customers across entire countries, and it would be impossible to demand they restart their infrastructure from scratch each time a tech innovation appears. However, the sheer age and criticality of some of the systems is eye-opening – if you have a current account, your money could rely on code written when Harold Macmillian was prime minister.”
When invited to give anonymous anecdotes about the old tech with which they work, one respondent replied: “the ATM network of a bank depends on antiquated Windows NT servers that have been patched.” Windows NT is an operating system released in 1993.
Another said: “A major banking cores system was built in the 1970s and still uses COBOL programming language”. COBOL, while it has been updated since launch, was released in 1959, two years before the first human spaceflight.
Paul Mihajlovic said: “This poses two problems. Firstly, code initially written for long-shuttered systems, and maintained by a small handful of aging experts, is a significant risk to critical infrastructure. It might go wrong, and if it does, it will be difficult to fix. Secondly, old technology is seldom agile. If you have to employ specialists simply to keep something running, that thing is unlikely to respond with lightning pace to changing customer needs, and this becomes increasingly and disproportionately expensive.”