Is Old Tech Putting Banks Under Threat Of Extinction? (bbc.co.uk)

Matthew Wall from the BBC has written a fascinating piece detailing our reliance on banks in today's connected and ever-changing world of technology. The premise: "You put your card in the cash machine but nothing comes out. The bank's IT systems have crashed again. But you need money fast, so what do you do? It's an unsettling scenario that is likely to become more common over the next few years as the big banks try to upgrade their IT systems, experts are warning."

Bruce66423 writes: In the old days everything was batch programs and reconciled once a day. Now, online access and the expectation that money will be immediately available makes the old systems obsolete, but impossible to replace because there are layers upon layers of complexity...

Comments

cash dispensing is not the business of banks

[sittingnut]

unlike what is implied here, main business of banks is extending credit (iow loaning money)at interest. money obtained through variety of means, mainly deposits.
and loaning money can be only partially subjected to automation, and usually require lot of human interactions and long term relationships, and lots of specific customization. that is why small banks and banks branches still continue to exist .

that is also why technology wont make banks obsolete anytime soon. if bank lose deposit taking due to technology ( a very huge if), they will get the money for loans from those who replaced they in that business.
 

About par for the BBC

[Archtech]

This article is just about what I would expect from the BBC. Apparently the writer has no domain knowledge or experience of his own, so he relies entirely on what a number of different people (some of them self-seeking) see fit to tell him. Then he tries to fit the pieces together, like a rather slow child attempting a jigsaw puzzle.

1. The title "Is old tech putting banks under threat of extinction?" is precisely the wrong way round. As we can all see, "old tech" has stood the banks in good stead and enabled them to run continuously and fairly reliably for 60 years or more. It's the addition of "new tech", and changes in the business, that add the risks.

2. '"For the next five years - and we're talking globally - every incumbent banking player who's been around for a while will have an increased risk of outages," says Julian Skan, managing director of financial services at consultancy Accenture'. The journalist adds no comment or criticism, because Accenture is entirely authoritative and reliable. For anyone who remembers that far back, "Accenture began as the business and technology consulting division of accounting firm Arthur Andersen". https://en.wikipedia.org/wiki/... The new name, as far as I know, was deemed necessary to escape from the appalling connotations of "Arthur Andersen". The interesting thing about the quotation is that it gives no reason for the alleged increased risk of outages.

3. Next, under the heading "Legacy issue", we are informed that 'The problem is that the old mainframe computers - the workhorses of the global banking industry - have been chugging away keeping tabs on all our transactions for decades now. They're slow and reliable'. There are only two glaring, outrageous mistakes in this. First, the "old mainframe computers" themselves do not pose any problem at all. Second, they are very reliable but absolutely not slow. No doubt Matthew Wall has some dim idea that the same mainframes have been chugging away for 60 years, but surprise! IBM and others have continually upgraded their mainframes, and those of today are among the fastest and most powerful computers on the market. The IBM guideline for mainframe response time used to be half a second - with up to 1 or even 2 seconds allowed where the mainframe was remote (in one case, users in Australia were getting a 2-second response time from a mainframe in London). As today's mainframes are much more powerful, and comms are quicker, I can't see that this response time expectation should have changed much. In fact, it is Windows machines and even Unix servers that are much slower and less consistent in the response time they give. Since mainframes were designed, along with their tightly integrated software such as IMS and CICS, to handle transactions at the fastest possible rate, they are far more efficient at this kind of work than any other computers - which is why the predictions, starting before 1990, of the mainframe's demise have never materialized. Oh, and Matthew - "The definition of 'a legacy system' is one that works".

4. "But the world has changed. We've gone mobile and online. We expect real-time transactions and access to financial services around the clock". And mainframes obviously provide the best possible back-end support for those requirements (which aren't really new anyway - 24-hour ATMs have been around for decades, and going "mobile" doesn't make any difference to banking systems).

5. "The new computer systems and programming languages designed to cope with this fundamental shift in our behaviour don't interact well with the old, slower back-office systems". This sentence is so wholly and inherently wrong that's it's quite hard to pick out the individual wrong ideas from the overall mess. The "new systems and programming languages" (whatever they may be - we are not told) were not designed to cope with "going mobile and online". They were partly designed to make computing (and especially software development) cheaper and more flexible,

Re: About par for the BBC

[cyber-vandal]

I was one if the younger ones who had to come into that environment and figure it out. Banking code is a mess due to politics, poor decision making and fear of touching someone else's badly written code that somehow works with a liberal spicing of some staff who have always been shit but good at bullshitting. In response to this the banks decided to throw the baby out with the bathwater and it's going come back and bite them very hard. Similar patterns are being repeated with the more modern code I work with now.