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The Green Sheet Online Edition

February 12, 2024 • Issue 24:02:01

Readers Speak: COBOL, the dinosaur on our back end

Anne Willem de Vries, co-founder and CEO of payment processing platform Silverflow, sent us the following warning about continued use of COBOL:

"From the outside, it looks as though the payments industry has enjoyed plenty of modernization and innovation," de Vries wrote. " And, to some extent, this is true: in the past decade or so disruptors like Square, Stripe and PayPal have made huge technological improvements to the front end. This has resulted in easy-to-use, sophisticated solutions that enable merchants to leverage the latest payments options on the market.

"However, very little has been done to improve payment processing's back end, which runs on technology that is older than most millennials. The global financial system hums on an unlikely engine: COBOL, a programming language relic of the 1960s. It powers everything from ATM transactions to stock trades. While it has served us well, handling trillions of dollars in transactions without major system failures, its ongoing prevalence has begun to pose a serious threat to our financial future.

"COBOL is an innovation dead-end. Integrating it with new technologies like Open Banking, blockchain or AI is nearly impossible. This stifles creativity and makes it difficult for financial institutions to implement modern features that would help to meet rapidly changing customer demands. Its age also makes it a security risk. Vulnerabilities discovered decades ago remain ripe for exploitation. Modern languages offer robust anti-fraud and security features that COBOL simply can't match."

After noting that university students rarely learn COBOL anymore, compounding the problems, he continued, "The COBOL crutch we lean on is starting to wobble, and ignoring the issue won't make it disappear. ... We need a coordinated, industry-wide effort to migrate critical financial systems away from outdated technologies. As technology providers, we have a duty to show people that there is no need to rely on legacy systems anymore by creating accessible, functional alternatives that are genuinely fit for the future."

Back-end solutions?

What technology solutions do you see replacing COBOL to improve the security, speed and sustainability of our financial system? Tell us at greensheet@greensheet.com. end of article

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