Thursday, Apr 25, 2024

FinTech’s Foundations COBOL


A fascinating article from the Wall Street Journal confirmed what I had always suspected. In terms of technology, all banking is still based on, COBOL (at least on the banking side).

The world of banking is very risk-averse when it comes to technology. There are backups to all systems and multiple power sources. Every system must live up to “5 9s” availability. This means the system is up 99.99999 % of the time. As the Canadian Government found out, changing out an old system and replacing it with new code and technology is problematic (aka Phoenix). Most banks are reluctant to make wholesale changes just to update technology. Old systems get replaced typically if they are broken, not if they are still working.

At the banking system’s core, in terms of technology, is a language older than me. COBOL (COmmon Business-Oriented Language) was written in 1959 based on the works of Admiral Grace Hopper. I worked in it, at school and on the job as well (at school I used WATBOL). I have a passing understanding of the language. It does, what it does, well.

FinTech continues to crow about it being new and exciting, and parts of it might be (the user interface is my guess). However, the heavy lifting (i.e. account creation, asset moves, etc.,) is all still being done capably by COBOL.

COBOL a Punched Card

Fear and Loathing

Is it time to fear FinTech? You should be skeptical of all the claims, but if the system works (for you), that is the primary decision point. If someone tells you how it is the future of banking, ask them about how they interface to the banking COBOL interface (see if they have an answer for you).

I am glad to see that old technology still keeps the world humming. Also, the finance world is so Risk-Averse they won’t change to new technologies quickly either.

Some say COBOL programmers are like cicadas. They come back every 20 years or so.

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FinTech Articles

  • Fintech is it the Answer? What does fintech really mean, and am I as “joe investor” going to be able to take advantage of technology breakthroughs ?
  • The FinTech Trader Terminator What happens if when the machines take over in the future they send a T-100 trader terminator back in time to screw up our finances?
  • Banking is Necessary Banks are Not. Banking is necessary however banks are not is attributed to Bill Gates, and I think I agree with him. How banks do business leaves a lot to be desired. 

The post FinTech’s Foundations COBOL appeared first on Canadian Personal Finance Blog.



By: bigcajunman
Title: FinTech’s Foundations COBOL
Sourced From:
Published Date: Tue, 20 Feb 2024 16:12:00 +0000

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