I’ve recently blogged about bank IT outages …
Bank IT outages ... let's talk about the bank systems Jenga
… and it is getting more and more common.
For example, in the UK, Barclays suffered 33 system failures between January 2023 and February 2025, according to data from the House of Commons Treasury select committee. Over the same period, HSBC and Santander were both hit by 32 outages. Meanwhile, Citigroup credited a client’s account with $81 TRILLION, when it meant to send only $280. This was due to an employee making an input error while using a system with a terrible user interface.
All of this is due to the leaders of these banks avoiding changing systems. Now, there is an imperative to do it. I’ve blogged about this every day for years – asking how you can be intelligent if your data is dumb? – but the debate goes on. Another example is a recent survey by 10x Banking found that more than half of banks’ decision makers believe their data silos and production bottlenecks are key barriers to embracing new technologies like artificial intelligence.
‘Core Technology Holding Us Back’ say 55% of banks – new 10x Banking research reveals
The thing this really comes back to is fear of change. Whether you are CEO or CIO, there is a fear of rocking the boat. In particular, in a bank, there is a fear of risk and a fear of failure. These fears fuel the avoidance of change and innovation. It’s fine ot innovate in the sandbox, outside of the core but changing the core is hard.
As I blogged years ago, 43% of US banks core systems are based on COBOL mainframe systems …
Will the last COBOL guy turn the banks’ lights out?
… and I would love to say that number has reduced, but it hasn’t.
Why COBOL Still Dominates Banking
It is the fear of change … and yet change is the only constant.
This balance between change which equals risk, and change which equals innovation and differentiation is the constant battle within all institutions but particularly banks. Why banks? Because banks run on the minimisation of risk. If change creates risk, why change? More specifically, if change creates the risk that I might lose my job, why would I risk it?
A lasting memory from a quarter century ago was trying to persuade a bank to refresh their core systems and a C-level exec took me to one side and said: “look Chris, the CEO stays in place for around three years. Why would someone who is secure in that role take the risk of screwing up?”
So, this is why we have massive amounts of technical debt and systems wrapped up in cement. The thing is that such systems are also high risk. If you suffer major IT outages it costs. Barclays Bank’s recent IT outages not only damaged the bank’s reputation but also left it facing a compensation bill of millions.
Therefore it is the balance. The risk of change versus the risk of not changing. Take your choice.
Related: Elon Musk’s Vision of Life in 2100: Futuristic Dream or Dystopian Nightmare?