So one of my resolution this year was to blog more about banking stuff on my blog so here’s a rant I’ve been working on in my head for a while. Heh, how’s this for a first run:
Stealing from Google’s mantra of “Don’t be evil.” I think that banking core processors ARE evil. They quite honestly keep bankers scared. They were all created 25 years ago with the intent of making banks efficient and for a while did a good job but where are they today? Still using the same 25-year-old technologies with little to no desire to update it and definitely not willing to listen to their customers.
They have dropped SO MUCH MONEY into their development of these now archaic systems that having to modernize would bankrupt them. So they get by through updating their bloated interfaces and through endless acquisitions of other companies that get it right and the core vendors just absorb the competition. Honestly, I can see why and how they got there. They saw how enterprise systems were being developed in the 80s and 90s and didn’t realize or see the endless benefits of staying nimble and agile. That’s not their fault…but what they are doing today is and needs to be stopped and changed. I’d love to work for a core processor and have them allow me to breakdown their breakdowns.
Well, at least the customer service is solid for these vendors, right?
Heh, yeah right. If the core vendors have a monopoly like they do why do they care about any sort of SLA? They can pretty much handle issues on a ‘when I’m done playing golf’ basis. And if the banker tries to fight back, the vendors just charges them for every additional call or work they the vendor had to do to fix the issue. So bankers just take it…
I keep picturing a dog (bankers) getting beaten by his owners belt (core vendors) in my head but maybe I’m being dramatic.
So why don’t banks just switch to a core system that isn’t evil?
Again, FEAR.
Because of the core vendors have wedged themselves so snuggly into these banks systems the thought of changing or what they call doing a ‘core conversion’ is quite honestly terrifying to many banks. Banks spend months and often years preparing for a possible core conversions and core vendors definitely don’t make it easy. But what really stinks is that the banks just jump from one proprietary system to another and end up in the same boat. But banks are cool with that b/c they are getting a better deal for the short term.
Banks need to revolt against this. They need to stand together against this type of practice and make the vendors fix these issues. Their has been talk about an open-source core (although my google search is bringing up nothing on the topic) which I absolutely LOVE the idea and think it can work if the right community gets around it.
I understand the need to make money but at some point, it needs to be about the greater good here. The betterment of the banking world. Who’s going to step up? IBM support the Linux movement, what core vendor wants to spearhead a change? I think whoever does, will solidfy their place in the coming decades of banking.
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