Banks invested a huge amount into these earlier systems which meant they were incredibly resilient, and could handle a huge amount of throughput at low latencies, even by today’s standards. The fact that many banks today still run these systems is testament to their success. This being said there is an important trade-off in that these systems are incredibly expensive to run, especially given that they have to be sized for peak processing, which is typically end of month reconciliation, leaving expensive capacity idle for large periods of time.

Whereas these earlier systems were considered successful for a long time, we are seeing banks increasingly shift focus towards core transformation, which hints to the fact that many of these banks are running on ‘burning platforms’. The typical first generation core was written to satisfy banking products from the 70’s, the needs of the regulator and consumer demands have shifted significantly since then, and continue to shift. A 2019 report by CACI estimated 25 million UK customers use mobile banking applications, this social trend alone has driven the need for continuous change and the need to handle the more volatile and 24/7 nature of mobile banking needs. Unfortunately for banks still encumbered with mainframes, not only are they expensive to run, the cost of change is also high. Compounding this problem, banks are facing increasing pressure to reduce cost.