Pay attention US financial sector, because the UK is one step ahead of you … sort of. They’re at least willing to admit they have a problem with software risk and IT system resiliency, which is on the path to recovery.
A recent report published by Tech Market View confirmed a 2012 warning by a director of the Prudential Regulatory Authority that the IT systems of UK banks were “antiquated.” and that he could not say with confidence that they are robust. The statements were delivered to a committee in Northern Ireland as they discussed the major IT failure at RBS/Ulster Bank in 2012 which affected the bank’s customers all over the world.
The report goes on to stipulate that these problems are so acute that the major financial services companies will be forced to outsource significantly more of their IT to third-party vendors and reduce their reliance on in-house IT departments. However, as we’ve talked about before on our blog, the problems don’t usually end after you outsource, oftentimes they’re just getting started.
We’ve done our fair share of work trying to inform financial industry leaders that they are playing with fire by ignoring software risk and not securing the stability and robustness of their critical IT systems. We even sent open letters to Chris Isaacson of BATS and the entire derivatives exchange industry about the very real danger software risk poses to the future of their organizations.
Years of cost cutting have taken their toll on legacy systems that are faced with increasing customer demand and aggressive competition. We’re tired of seeing common -- and preventable -- mistakes slip through the cracks in what are supposed to be world-class software development organizations.
The problem is most organizations are caught in a hamster wheel, repeating the same software development mistakes they have been for years. Sure, they’ll adapt agile to make their development appear improved on the surface, and better suited to support the fast pace of development in the financial sector. But even that won’t ensure every new code sprint is adhering to the proper architectural requirements -- a concept so huge, a single programmer couldn’t conceptualize it by himself. So at the end of the day when the code is pushed into production, that organizations chance of a potentially huge IT glitch has increased significantly.
We’re hoping this new report will invigorate the UK financial sector to take a serious look at the amount of software risk present in their IT systems. But chances are it’ll take another massive, world-wide IT glitch to wake us all up to the very real risks present in our IT systems. Just don’t say we didn’t warn you.