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.
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.
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.
Source: Computer Weekly, 2016.
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Thursday Nov 3, 2016