NAB fail exposes legacy IT wasteland

NAB fail exposes legacy IT wasteland

Summary: 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according to an analyst who believes that the backbones of banking IT resemble a crumbling, unsupported wasteland of outdated technologies.


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according to an analyst, who believes that the backbones of banking IT resemble a crumbling, unsupported wasteland of outdated technologies.


The banking sector is based on a barren wasteland of outdated, unsupported IT infrastructure, according to an IBRS analyst.(Wasteland image by Mrhayata, CC BY-SA 2.0)

Jorn Bettin, advisor for analyst firm IBRS, said that the problem big banks have is building new systems on top of outdated infrastructure.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.

Topics: Outage, Banking, Tech Industry

Luke Hopewell

About Luke Hopewell

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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  • Working for a major bank myself that lack of spending on decent DR systems is scary. Even in the wintel area I am dealing with so called critical systems that are running on Windows 2000, with no decent backup system or DR site.

    If the banks just spend a few percent of the billions they make then these problems would be solved
  • I'd argue that the issue isn't the programming language, but more likely what the bank is willing to pay someone to support the application. Pay someone a competitive wage and the language becomes a non-issue. There are several people out in the market who will do the work if the money is there. Programmers go where the money is.
  • Wrong perspective....has got nothing to do with support. The issue is that the banks need to rebuild their systems and but also step outside the current approach to application construction. If the human is eliminated from the development phase then support becomes a non issue. All you do then is maintain a single properties file rather than millions of lines of code. In this world the application can be auto generated in a programming language of choice.
  • As someone who works in / with application development the amount of time in an application life-cycle devoted to the (one time) writing of code is insignificant compared to everything else that goes into creating and supporting an application.

    What (I suspect) has happened to the banks is they have been sitting on 'legacy' applications (and the infrastructure they run on) doing as little maintenance as possible. At some point (hopefully before you can't actually do your business anymore) you need to 'pay back' that maintenance - either through running with higher risks, or a whopping big expensive modernisation project.
  • But isn't NAB replacing its legacy transactional systems under the Nextgen project?
  • Yes, it's NAB's plan to do that, but it all seems to be moving rather slowly.

    Suzanne Tindal, News Editor
  • Gosh isn't Jorn is such a bore.. I am sick of listening to people like him crapping on and on and on .... check his profile ---- another bloody consulting group. YAWNNN mate if you think the only problem is COBOL I think you need to take a reality check.... there's layers of problems !