For the last few months many banks and other financial institutions have suffered from a set of various software faults.
This January the Faster Payments System of the Lloyds Banking Group, which is aimed to speed up the transfer of cash, was hit by some glitch in consequence of which many users did not get their wages as well as bill payments in time, some users faced the problem of duplicate charges. In general, the flitch affected over 400,000 trades which failed in fulfillment of their guarantees.
Nevertheless these hardships are nothing as compared to the bungled upgrade of the software last year which destroyed the reputation of RBS, NatWest and Ulster Bank having disrupted the accounts of their customers. Another case was in the United States when the error was detected in the computer-controlled trade of Knight Capital which as a result lost its balance sheet.
So what is the reason?
The key of this problem is the institutions are using horrifically complex business software today. As Lev Lesokhin, a strategy chief of Cast, mentioned today developers do their best while creating new functions but make little effort to ensure that the existing mix has no problems to adopt successfully the new software. The reason is that today’s computer systems are too complex and include a lot of sub-systems which are written in various programming languages. Thus, one needs to carry out enormous amount of software testing activities to ensure the system has no more difficulties.
According to Lesokhin this is not the only issue: in view of severe financial times less efforts and money were spent on quality assurance, re-equipment and modernization. Particularly in the UK there has been large-scale underinvestment to the banking institutions’ technologies. Many banking apps still use the codes dated 1960s which are unfamiliar to most developers-newcomers.
There is also one factor that at a glance can stay unnoticed ―the takeovers that is a frequent occurrence in the financial industry today. Specialists are sure that bringing together two separate systems can take more than 10 years. Just imagine that there are banks having more than 40 various mortgage systems formed as a consequence of acquisitions and mergers happened!
While it is easy to detect the existing problems it appears to be hard to find the proper solutions of them. The issues are also deepen by the need of institutions to roll out novelties and update existing banking application and other online services in the financial industry. The ordinary users have nothing more to do but to be warned and prepared for such failures in future.