Chief information officers’ attitude of not replacing core systems unless there is a problem is outmoded and will lead to banks losing customers in the digital decade, says Chris Skinner.

Someone recently gave me an MP3 Jukebox. The size of a Walkman, this jukebox stores 60Gb of music – the equivalent of about 3000 CDs or four months of non-stop music. That is music I carry with me everywhere, like having my whole collection of discs in my pocket.

Why am I telling you this? Because this is the digital decade: everything is going digital. An example is the mobile telephone, which is now a television, music player, camera and entertainment console all in one … and, by the way, also a telephone.

Banks are aware of the digital decade but are seriously constrained because their systems have evolved over 30 years or more. The systems are complex and messy but they work. There are cracks patched over and things that do not fit but they work. So why change them?

Branch networks are a good example. Most of these networks have been in existence since the 1980s with two-thirds of branch teller stations running on 3270 or OS/2 systems. Many branch offices connect to head office at speeds of less than 64kb per second – about a 10th of the connectivity of a domestic PC using broadband. My local branch was recently used to film the BBC television programme Antiques Roadshow because it was the only place where the equipment was old enough to demonstrate the origins of computing.

Many of us would like to ditch these systems and start again but no-one does because the systems work (just about), it is too costly to change them and it could mean the loss of the IT Empire. No wonder chief investment officers are not keen.

So here we are, mid-way through the digital decade, with banks’ customers converting their communications and entertainment – nearly their entire lifestyle – to a digital world. Is it not about time that banks did the same? How ready for the digital decade are FORTRAN and COBOL? You may laugh but, unbelievably, I do know some banks that run their core processing in these ancient languages.

Why are these systems still in use? Because most bankers are too mean to invest in their renewal – they’re not broken, so they won’t fix them.

My message to bankers is: get rid of them. We live in a radically different world to the one in which most core systems were implemented. Chuck out those systems before they become so constraining that your customers chuck you.

Chris Skinner is founder of Shaping Tomorrow and chief executive of Balatro Ltd. Find out more at or e-mail Chris at


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter