Lev Losokhin, senior vice president of strategy at Cast

Banks can’t teach old apps new tricks, says a report on Fintech systems failure. Worse than that, new Agile development systems are making banks even more fragile, it says.

The new Software Intelligence Report was compiled by Cast Software to find out why the likes of Virgin Money and TSB are continuing to have reputation shredding IT failures.

Cast’s study analysed over 700 million lines of code and 2,000 in-house and externally built apps. The point of the exercise was to examine if and how older applications threaten the resilience of banks during IT migrations. Its key findings were that applications from the 1980s are still bearing much of the strain in banking technology, three-quarters of the applications built in the 1980s still have a high impact on the service continuity of today’s businesses.

As a consequence, the older applications will cause substantial damage if they fail. According to the Cast report, 62% of the applications built in the 1980s will have a higher financial impact than modern apps if they fail today.

However, today’s modern ‘agile’ development culture does not appear to have robust foundations either, according to the report. New app development methods aren’t designed for long-term success. Applications built on the Agile Methodology are, ironically, less agile, meaning they are harder to integrate with new systems.

The recent IT problems experienced by TSB proved that it’s very risky and difficult to ask legacy applications to work on modern platforms, according to Lev Losokhin, senior vice president of strategy at Cast.

“The financial services sector is underpinned by decades-old, legacy IT systems which have been pulled together through various mergers,” said Losokhin.

It’s impossible for banks to update and maintain their current IT infrastructure as the skills required to do this are disappearing. So banks are too nervous to touch old systems for fear of an outage.

The interfaces to modern apps and web front ends make the systems even more complex for any individual architect to understand, according to Losokhin. Banks should be testing and identifying software issues through structural analysis, if they want to make a disaster free digital transformation.

“Testing on its own will not solve future IT outages as this may only address some of the faulty software. And often there is not enough time to adequately test because development takes longer than planned and the rollout deadlines don’t move.” said Losokhin.

However, software intelligence can quickly identify the risk in each IT system.

Software development needs to be a more professional engineering discipline, argues Losokhin. “Practices must be performed on an orderly schedule to produce trustworthy applications. As long as this level of discipline is not introduced, banks and financial services will continue to suffer from IT failures”.

by Bill Boyle
IBS Intelligence Senior Editor