Big bank customers should brace themselves for ongoing outages and system issues, according to an analyst, who believes that the backbones of banking IT resemble a crumbling, unsupported wasteland of outdated technologies.
Jorn Bettin, advisor for analyst firm IBRS, said that the problem big banks have is building new systems on top of outdated infrastructure.
According to Bettin, a bank takes care of tens of million lines of code, with 20 to 50 per cent of these lines based in legacy formats. For example, they might be written in COBOL. Knowledge of these legacy systems is often no longer be taught in educational institutions, bringing to light an imminent skills gap in the financial services sector.
"Banks are currently struggling with the issue of COBOL programmers going into retirement. The staff in question tend to be the last remaining experts in these languages and related technologies, and typically they are also the last remaining experts regarding specific — sometimes mission-critical — applications," Bettin said.
The problem according to Bettin, is building layers upon layers of technology within a bank that eventually, nobody has the expertise to understand.
"Large software applications can reach a stage ... where no one has a reliable grasp of all the design patterns used in the implementation, and all the dependencies between the components that make up the application," Bettin said.
"Once that stage is reached, it becomes less and less likely that the application can ever be completely replaced by a newer system at some point in the future," he added.
In light of this, banking customers ought to brace themselves for more system issues, delays and failures.
Bettin said that there are plenty of IT accidents waiting to happen in the Australian banking sector, and that NAB's issues are just the tip of the iceberg.
This afternoon, NAB has reported another technology problem affecting its customers following shocking weekend delays that left millions in financial limbo, this time with it's internet banking facilities.
The bank took to micro-blogging site, Twitter in the early-afternoon and reported that the high volume of web traffic that stemmed from concerned customers checking their balances has led to a slow down in operations.
"NAB Internet Banking is currently running slower than usual due to the large no. of users accessing their accounts. Sorry for the delays," NAB said in a tweet.
The internet banking slow down comes off the back of a horror weekend for NAB where a corrupted file stalled thousands of incoming and outgoing NAB transactions which left many facing bank fees and a weekend without their pay.
NAB said today that no customer should be out of pocket as a result of the weekend's issues with a spokesperson inviting customers who can't find satisfaction dealing with their own institutions to contact NAB for a resolution to their dramas.