DXC’s Mainframe Engineering Services team helps banks master COBOL core banking

Gartner defines a core banking system as “a back-end system that processes daily banking transactions and posts updates to accounts and other financial records. Core banking systems typically include deposit, loan and credit processing capabilities, with interfaces to general ledger systems and reporting tools.”

Simple enough.

Or it would be if banks didn’t have to cope with the fact that, according to Reuters, 43% of the core banking systems in the United States are built on the common business-oriented language (COBOL), a language that predates Coke cans, computer mice and The Beatles. In fact, 95% of ATM swipes, 80% of in-person transactions and multiple 40-50-year-old U.S. federal government systems also rely on the 220 billion lines of COBOL still in use today.

But what happens if something goes wrong or you need an update?

Unfortunately, most engineers who created and worked on these heritage systems have retired, taking crucial knowledge and expertise with them.

And although there’s been an uptick in young developers schooled in COBOL since then, there’s just not enough know-how to go around.

The problem is that new and relatively simple transaction and balance-holding systems have to connect with ancient system architectures that have been continually patched to meet changing business needs. Of course, neither banking executives nor customers ever get to see this part of the technology stack. So, a culture of “If the back-end’s not broke, don’t fix it” has developed, especially given the considerable risk, expense and timescale involved (it could take years).

Today, 45 of the top 50 banks, eight of the top ten insurers and four of the top five airlines continue to rely on mainframes for their mission-critical operations

• Companies claim they’re spending an average of $65 million annually. One-fifth is swallowed up by maintenance alone.
• As the price of cloud infrastructure is decreasing, mainframe licensing and staffing costs are increasing, pressuring most companies into making a change.

• Pressure to reduce IT OPEX and CAPEX.
• Changing business demand improved agility and speed.
• Continuity and resiliency of business operations must be maintained.
• Operations have to remain secure and compliant.
• Talent shortage and skills gap challenges.
• Capacity and operations need to be able to scale rapidly.
• Compliance, risk and governance must keep up to date.
• Faster time to market is a perennial success factor.

DXC helps clients run, maintain and transform existing mission-critical mainframe applications by drawing on 5 decades of mainframe application experience and a deep understanding of mission-critical systems and operations. We know what it takes to create sustainable enterprise change, resolve cultural and process challenges, and rationalize the business implications.

• Three-quarters of professionals (74%) view mainframes as long-term strategic platforms, despite of adverse perceptions of the technology.
• Most respondents denied planning to retire their mainframes, and nearly 80% considered mainframes modern (or mature).
• Most participants said mainframes will never disappear despite reports that mainframes are being discarded in favor of cloud-based services.

Our experts have all the tools to operate and maintain existing environments while enabling transformation and modernization strategies across the entire client lifecycle, from advisory and execution to run.

DXC Mainframe Engineering Services enable run- and change-the-bank application development and testing through Agile and waterfall delivery methods, including:

• Project management
• Requirement definition
• Design: functional and technical
• Development: unit
• Testing: unit, system and integration
• Independent verification and validation, QA
• Testing automation
• Migration to production
• Production support
• Project reporting and control

Need:

• Managing complex environments and existing mission-critical systems
• Maintaining regulatory compliance
• Aging workforce, diminishing talent pool
• Ensuring business/service continuity
• Addressing talent shortages, reskilling and upskilling COBOL/CICS resources
• Addressing speed-to-market for new products/services
• Supporting an ever-increasing range of customer channels and demands
• Supporting data analytics and Al services
• Lowering total cost of ownership (TCO)

Capabilities:

• Global expertise and tools to manage customizations and existing mission-critical environments while also reducing TCO
• World's largest Hogan practice with proven global location strategy, operational processes and SLA
• Standardized approach and knowledge framework to document
• COBOL/CICS academy and certification program
• People-first global HR strategy with key personnel
• Retention
• Deep understanding of the emerging tools and infrastructure that supports the ongoing delivery of COBOL/ClCS applications

IBM, manufacturer of mainframe computers that run on COBOL, maintains that the future is not as black as it’s painted. The company has initiated several COBOL fellowships and training programs for budding IT professionals. These programs have trained more than 180,000 developers over a dozen years or more. However, COBOL veterans reckon it takes more than just knowing the language to succeed in the long run. COBOL-based systems differ significantly, and because veteran programmers rarely wrote user guides, troubleshooting can be highly complex.

COBOL is a high-level, procedural programming language for business applications. It was developed to standardize, streamline and make more readable complex business processes and data processing. COBOL has powered mission-critical systems in finance, insurance, health care, government and many other industries. Rigorous syntax and error-checking capabilities have enabled COBOL programs to withstand multiple updates and adaptations without endangering system integrity and to run continuously for decades.

The vintage language's reliable efficiency makes it the perfect choice for handling extensive data-processing tasks. The fixed-format syntax optimizes code generation, enabling COBOL execution with minimal overhead. Also, COBOL's comprehensive file handling and indexed access support facilitate rapid data retrieval, resulting in superior batch-processing performance.

Being highly scalable, banks can rely on COBOL to handle expanding datasets and complex business logic accurately and consistently. Its flexibility, modular programming and easy interfacing with other languages and systems perfectly integrate heritage applications with contemporary and emerging technologies.

In industries where data security is vital, COBOL's resilient design enforces strict data typing rules and extensive validation, mitigating the risk of data corruption and security breaches. It also ensures transaction atomicity and consistency, protecting sensitive information in critical systems.

Backward compatibility, which enables the easy migration and integration of existing systems with modern platforms, makes COBOL the perfect solution for businesses looking to modernize their infrastructure with minimal disruption. It’s now regarded as a crucial asset for banks aiming to build or rebuild resilient systems to stand the test of time.

The general feeling is that working on existing mission-critical systems increases the risk of downtime.

While security, cloud working and software licensing costs polled the most votes in the survey, there were other drivers, too:

• Integration issues (26%), organizational technology consolidation (25%), hardware dependency (23%), and lack of scalability (19%) reflect increasing platform-specific challenges as the rift between existing mission-critical systems and cloud migration widens.
• Most participants (41%) believed that retaining heritage systems increased the risk of downtime.
• The inability to scale to meet new demands (34%), a lack of business agility (32%) and the difficulty of integrating with modern tech (32%) also concerned advocates.

1. Access to one of the world’s largest mainframe engineering talent pools
2. Industry-leading tools and automation
3. Reduced risk and existing mission-critical platform maintenance costs
4. Outsourcing of run- or change-the-bank services
5. Access to an ecosystem of other products and services that work with COBOL and customer information control system (CICS) applications

Financial services group: Provided mainframe developers to analyze and stabilize the group’s core application after assisting their internal resources with a production outage.

Major global bank: Supplied more than 35 Hogan mainframe developers from the United States and India to enable greater productivity against the bank’s development backlog.

Well-established U.S. bank: Deployed a blended team (the United States and India) to provide 24/7 primary production support for both Hogan and non-Hogan (mainframe) applications.  

• Global resource pool
• Proven approach to recruitment and retention
• Academies and training programs to sustain and grow talent
• The core/flex model allows teams to scale up and down rapidly according to fluctuating requirements

• Largest financial services mainframe practice in the world
• 45+ years of experience in developing and supporting mission-critical mainframe systems within financial services
• Hogan’s development is deeply rooted in COBOL and mainframe technology
• IBM partners for decades
• Expertise in mainframe tools and technologies

Partnering with DXC Mainframe Engineering Services enables financial institutions to modernize their existing mission-critical platforms while positioning internal teams to execute modernization and transformation strategies.

Engaging DXC significantly de-risks the transformational process by reducing the changes required and ensuring the continuity of skilled staff, and developing and supporting the banking platform. It also allows the bank to reduce costs by utilizing emerging technologies and our global resource pool.

If you’d like to find out more about what DXC’s experience and technology could do for your organization, including what to do about sourcing programmers with appropriate and proven unicorn skills and knowledge, visit our website or contact us.