Wednesday, July 11, 2012
The silly season is upon us so let us play a game to demonstrate why banks are not fit for purpose.
Efficient companies that move data around quickly tend to use up to date technology. It makes sense. Facebook, Amazon, Google - even Microsoft use the latest stuff because it is faster, more accurate and easy to develop and maintain than the old stuff. Hiring someone who can code a programming language designed in 1959 (COBOL) is pretty hard these days.
But guess what? Some bank's still run on COBOL. And Sybase. And DB/2. The spaghetti web of systems most banks use means patches and fixes and rarely new developments or full blown replacement of legacy systems. The reporting systems are legendary. They are really poor (except Goldman Sachs to some extent). Exposures unknown. Value at Risks off the charts. Banks may appear to be glossy on the outside but inside they still use quill pens and HP calculators.
Here is the game:
Click here this and type in the keyword box the word COBOL (make sure the country is UK).
Hey presto! JP Morgan and Merrill Lynch are trying to hire people with COBOL skills.
Type in MySQL (used by Facebook, Amazon, etc).
Not one investment bank.
Try DB2 or SYBASE.
Yep. Mostly banks.
The banks need to wiped out so new kids can come in and do it properly. Costs would fall, efficiency would increase and capital requirements would tumble. If capitalism were allowed to work properly, these old dinosaurs would have died off and been replaced by men and women with beards.
But alas, this is not the case thanks to the technocrats and self interested banking lobby groups wanting to keep the dinosaurs alive and provide jobs to people in their 80s.
German courts put Euro into a coma (despeigel)
Spain gives up on its economy (reuters)
Correlation is the new sitcom (marketwatch)
Wonga.com to buyout Goldman Sachs.