The recent cash machine debacle at RBS, Nationwide, Ulster Bank and NatWest could happen again unless billions of pounds are spent on updating clapped-out software systems, a leading expert has warned.
Ben Robinson, a director of the software firm Temenos, says the problem of aging and inadequate software is pervasive throughout the banking sector and a major upgrade is urgently required. With RBS expected to reveal a £100 million loss because of the computer meltdown, it is a safe bet that most leading banks would heed the advice promptly. PAYE umbrella contractors specialising in the financial IT skills market are, it would seem, about to find themselves very much in demand. The cost of renewing these systems is set to run into many multiples of the RBS loss.
Mr Robinson said: “The IT infrastructure of many of the world’s leading high-street banks is decades old and is struggling with the rate of change in the industry and data demands that banks are experiencing today. Recent well-publicised system problems could have happened at any number of large retail banks, and if action is not taken now such issues are likely to become more common.”
Experts in the world of computing believe that the banks were so deliriously preoccupied with the immediate pursuit of super-profits during the boom years that they completely neglected investment in IT, an area that was almost certainly inadequately regulated. Current systems, many of them written in ancient languages like COBOL, simply cannot cope with today’s volume of daily transactions.
IT contracting in banking suffered acutely this year, with many experts forced to accept take-it-or-leave-it 10% rate cuts. How times change.