Despite it being more than 60 years old, it is thought that around 70% of large corporations – including those in the government, banking, finance, insurance, and automotive industries – still rely on the programming language COBOL for much of their mission critical work.
Anne Willem de Vries, co-founder and CEO of payment processing platform Silverflow, explains why this reliance on an outdated language “could prove to be the financial system’s downfall, and how to move away from it once and for all.”
Silverflow recently secured a €15 Million investment “led by industry veterans and payments experts at Global Paytech Ventures, founded by former Mastercard Europe President, Javier Perez.”
de Vries believes that payments has benefited from innovation and modernization but little has been done to improve the backend operations which has been running on antiquated systems – perhaps most troublingly, COBOL an old school coding language from the 1960s/
“It powers everything from ATM transactions to stock trades. While it has served us well over the years, handling trillions of dollars in transactions without major system failures, its ongoing prevalence has begun to pose a serious threat to our financial future,” says de Vries.
As noted in the update share with CI, COBOL is an innovation dead-end.
As explained in the note, “combining Integrating it with new technologies like Open Banking, blockchain or AI is near 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.”
de Vries says that “compounding these issues, there is a dwindling pool of programmers able to maintain these aging systems.”
Also universities “rarely teach COBOL anymore, and younger generations understandably tend to gravitate towards more in-demand and modern languages.”
There is a growing shortage of skills shortage which places legacy systems at risk.
“The COBOL crutch we lean on is starting to wobble, and ignoring the issue won’t make it disappear. While there have been calls for an upskilling drive, this is not a sustainable, long-term solution. We need a coordinated, industry-wide effort to migrate critical financial systems away from outdated technologies.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.”