Why banks across the globe need developers from emerging markets
Common Business-Oriented Language, or COBOL, is a computer programming language designed back in 1959 for business use.
Nearly 60 years later, organizations across the world are still using it despite experts suggesting that it be phased out due to its various limitations.
COBOL remains one of the most prevalent programming languages amongst financial institutions globally, powering millions of banking transactions.
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In fact, according to numbers from Reuters, 95 percent of ATM swipes and 80 percent of in-person transactions in the US still use COBOL.
Supporting that figure, another study noted that over 90 percent of the Fortune 100 still run mission-critical applications in COBOL, including transaction systems such as credit-card processing and large travel logistics. Over 90 percent of the applications used today are expected to still be in use over the next five years.
The decades-old programming language isn’t headed to the grave anytime soon. A rip-and-replace of old mainframe systems is expensive and complicated; the migration process will probably take years.
Besides, why fix what isn’t broken? COBOL works fine for the needs of these organizations. The only issue is that COBOL isn’t popular with younger programmers, resulting in a talent gap.
A quick search on recruitment website Indeed for COBOL developers returned close to 900 jobs in the US, most of them for financial services, including JP Morgan Chase, Bank of America, Morgan Stanley, and Charles Schwab.
According to a Wall Street Journal report, various online courses on COBOL are offered in developing economies, which have now become key technology-outsourcing centers for banks.
The common complaint about COBOL is that it isn’t versatile. It uses English like syntax, which results in reams of code. On top of that, it’s mainly used for mainframe configurations. In an era of cloud computing, young coders do not see a great amount of career progression with COBOL.
Interesting to note, COBOL isn’t the only language with decades behind it. One of the most popular coding languages, C, is still widely used despite being created 45 years ago.
However, old technology is costly for banks. According to an EY report, banks typically spend approximately 75 percent of their IT budgets on maintaining legacy architecture.
Even as fintechs are cropping up to provide new services leveraging new technology, it remains costly for banks to add on these functionalities to their systems.
As long banks remain tied to COBOL, there will be a consistent demand for people fluent in the programming language.