2020’s COBOL Crisis is the Canary in the Coal Mine for Established Banks and Insurers

Multiple US state government departments were in the news recently, calling for COBOL programmers to come forward as their mainframe systems failed to handle a surge in unemployment claims processing – a result of the COVID-19 pandemic.

It is common for an emergency to shed light on an otherwise darkened corner of our technical infrastructure, but the pandemic was merely a tipping point for this eventuality.

Canaries in the Coal Mine

The truth is that this challenge poses a threat to more of society than most commentators know. It is endemic in established industries globally. Financial services providers, insurers, investment and retail banks are the organizations for whom this platform is most embedded. An estimated 70% of the world’s commercial transactions are processed by a mainframe application at some point in their cycle, which means US State Governments are merely the canaries in the coal mine.

While recruiting COBOL programmers out of retirement may help the immediate crisis, it really is papering over the cracks and does nothing to solve the deeper issue. It may not even be an option the next time such a crisis is upon us.

The challenges faced by the States of New Jersey, Kansas and Connecticut are not a result of COBOL, or any other programming language; the language is just a syntax for expressing business rules. Rather, they are caused by the arcane mainframe environment the programmers must inhabit to maintain the programs.

Reality of Maintaining Old Programs

No self-respecting programmer would claim COBOL is beyond their ability. However, navigating the reality of maintaining old programs, with none of the creature-features they are used to in a conventional environment, is at the heart of this crisis.

Enterprise IT has been built up over years like geological layers. The deeper one digs into a company's core processes, the more ancient fossils will be found. These are usually the parts integral to supporting the layers above and, over decades, the oldest have become buried beneath layer upon layer of interdependency and algorithm.

These challenges are not unique to the mainframe environment, but many more facilities exist to solve them in more modern and familiar computing environments. Facilities that the current generation of programmers see as table stakes in any programming exercise.

Rather than recruit as many septuagenarians as the HR department can find, perhaps a more strategic answer is to put the programs into an environment where millennials can work on them as easily as any other application they are used to supporting. Modern fintech providers would not dream of instigating core business processes in architectures unfamiliar to a modern workforce.

It’s not a quick fix, but this can has been kicked down the road for far too long; and the impact of the current crisis has revealed just how fragile this critical part of our infrastructure has become as a result.