You don't have to rip out legacy code to run modern banking
systems.
IT managers are under pressure to overhaul ageing legacy systems
and replace them seamlessly with more "sexy" web-based technology.
But in the rush to modernise, companies risk ignoring a short cut:
Cobol.
Cobol has underpinned much of the financial sector's IT
infrastructure since its inception in 1959, and it is still going
strong. According to industry estimates, there are currently more
than 200 billion lines of Cobol code used in today's business
applications, with several billion lines of new application code
added annually.
Financial services organisations face a number of regulatory and
business challenges, all of which have major implications for IT.
Organisations, particularly retail banks, are under constant
pressure to reach more customers, more effectively. This means
enabling a seamless connection between data contained in legacy
Cobol systems with new delivery channels.
Financial services companies also need to stay in line with
regulatory developments and retain the ability to adjust and adapt
IT infrastructures accordingly. This is particularly important with
Basel 2, the revised code on risk management. In the UK, banking
organisations also need to be ready to deal with the possible
adoption of the euro and the IT implications that go with it.
Maximising budgets
On top of this, companies are constantly looking to preserve
existing IT investments, and get the most out of current systems.
This means taking a fresh look at how Cobol-based legacy systems
can be further exploited. In today's economic climate, this issue
is imperative for financial services IT departments under pressure
to get increased return from every pound spent.
Reconcile stability with agility
The Cobol platform is renowned for stability and
cost-effectiveness. Modern Cobol application development tools
enable organisations to plug-in to existing Cobol-based legacy
assets, bringing them up to date, and also provide for the benefits
of new technologies embodied by web services.
Cobol's strength lies in its simplicity - traditional "stove-pipe"
applications operate individually from other applications in the
enterprise, devoid of interactivity between systems and
connectivity risks.
While many software companies are quick to shout from the rooftops
the current mantra of "rip and replace", for financial sector
companies wishing to take advantage of web services, replacement is
rarely an option.
Financial institutions in particular, have many years of data
and business rules bound-up in legacy systems, so they are
primarily on the look-out for the cost-effective option, rather
than pursuing the expensive route of updates and downtime in the
transfer.
Replacement risks
Financial firms also harbour concerns about the risks associated
with replacement operations. In the tough economic climate it makes
more sense for the IT director to renovate existing legacy assets
to ensure transactional security is maintained, instead of
embracing divergent new technologies that may not be ready for
mission-critical deployment.
Legacy applications have safeguarded information assets for
decades, maintaining scalable, fault tolerant production systems.
For the IT director, removing data from the Cobol platform and
redeveloping onto new software platforms could result in
bottlenecks, corruption, loss of data or worse: continual
redevelopment to make code run as tightly as on the Cobol
platform.
Financial services organisations around the world support a huge
range of incompatible systems and there are honest differences of
opinion on how integration of new and legacy assets can be
accomplished.
When thinking about developing the IT universe, we need to go back
to business issues first, and only then answer questions on IT
vision, architecture, customer relationships, multichannel banking
etc.
Cobol has a long history, and as the most widely used language
for large-scale business applications, provides financial services
organisations with the infrastructure to provide the new services
needed to remain competitive.
Ian Archbell is vice-president of product
management at Micro Focus