

Big banks need IT reform almost as badly as regulatory change  - aristidb
http://www.economist.com/node/16646044

======
aristidb
I was... "fascinated" by this quote: "That is good news for start-ups such as
Metro Bank, which wants to open more than 200 branches in Britain by 2020.
With such grand designs, isn’t Vernon Hill, one of the bank’s founders,
tempted to build an IT system of his own? “I hate programmers,” replies this
dyed-in-the-wool entrepreneur. “They only cause trouble.”"

~~~
Empedocles99
It's a good thing that bank doesn't use any software.

~~~
eru
You have to go with the lesser evil.

------
aristidb
META: Why did the title change? I cannot edit the title of my own submission
anymore... Was it merged with a duplicate submission? If so, then there's also
<http://news.ycombinator.com/item?id=1541336> (which was created just a few
minutes after my submission)

~~~
naner
I believe sometimes mods change titles to be more accurate or neutral. I've
had it happen to me before, too.

------
cjlars
Having worked in operations for two major banks, I can confirm the article. We
used software in DOS emulation and old fashioned command prompts to process
trades, which were essentially done by hand. This was during the wave of
consolidation leading up to the financial crash. Why improve when you can buy
the competition?

------
oasisbob
It's not just big banks, small community banks (and credit unions) are at the
mercy of convoluted system vendors as well.

A system I know of includes many barely-integrated parts, most of which are
from different vendors: \- A core processing system

\- An online banking system

\- An add-on to the online banking system to provide "enhanced" logon security
to comply with an FFIEC mandate

\- An add-on to online banking that provides online statements

\- An email-alerting system (think "your account is overdrawn")

\- A loan origination system

\- A loan servicing system

\- A CRM system

\- A document archiving system

\- A mobile banking "solution"

The WTFs you find in these systems will boggle the mind, and seamless
integration is maddening.

~~~
VMG
Here in Germany, I haven't found a bank that has _any_ email functionality or
a post-2001 web interface.

Maybe the reason why it takes 3 days to transfer funds to another account
really is incompetence rather than greed.

------
hga
If you want to gain some domain knowledge in this area, especially for smaller
community banks, be sure and check out the excellent 5th comment.

------
motters
One of my previous jobs involved applications used by some banks, and I got to
see how archaic some of the hardware still in use was. In one bank - to remain
anonymous but is a well known name - they were still using a 25 year old
computer system, which was older than I was at the time.

~~~
byrneseyeview
I know of one dearly-departed bank that used a mainframe system so ancient
that there was only one company left that supported it. Since the early 90's,
that company had had just one customer.

------
bsiemon
What is wrong with mainframes?

The problems banks solve are the reason mainframes exist. Billions of data
points that must be processed 100% correct 100% percent of the time. It seems
wrong to demonize mainframes as old and outmoded.

~~~
anigbrowl
It's not the idea of a mainframe in and of itself. It's that the longer you
have such a system in place, the more difficult it becomes to update it.

The State of California still runs all its payroll processing via an ancient
mainframe running COBOL. Making changes is difficult, fewer and fewer
programmers are available to perform the work (and so it costs more) and the
problem just keeps getting worse. Apparently they have been trying to replace
it since 2004, but the legislature doesn't want to provide the $100 million
that is supposedly required.

------
mkramlich
When it takes 2 banks of mine about a week to decrement a number in one bank's
database and increment a number by the same amount in the other bank's
database, there's something _horribly wrong_ somewhere.

------
isnoteasy
Banks fear the complexity of IT. Now they are pushed to get into the challenge
of offering new services that require a complex setting, so they smell
problems in the near future.

------
j_baker
I agree with this article, but I admit that the Little Britain reference in
the title is what made it for me.

<http://en.wikipedia.org/wiki/Carol_Beer>

