The ancient technology pitting ‘dinosaurs’ against young banking engineers

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In 2014, French software engineer Bertrand Besnard referred to COBOL as a “nuisance” and “something everyone wants to get rid of.” He then went on to urge fellow software engineers to learn the programming language that has been on the brink of extinction for 30 years but has managed to remain an integral tool in banking.

Besnard’s argument was that the predicted demise of COBOL, developed in 1959, has yet to come to fruition as banks have continually resisted expensive plans to overhaul their transaction processing systems to rely on more well-known and well-liked programming languages like Java or C#. COBOL’s longstanding reputation as an outdated technology has actually created a unique opportunity for those with the “courage” to learn it: a potential career “gold mine,” he said.

Fast-forward four years and COBOL is still widely used at most banks for retail processing services, despite the fact that the majority of new tech talent entering banks were never taught the legacy programming language and have little interest in learning it. This has left the “gold mine” to software engineers who are in their 50s and 60s, some of whom had previously retired or who had even been laid off. COBOL programmers can earn around 20% more than those who specialize in Java, according to Bill Hinshaw, founder of COBOL Cowboys, a staffing and consulting firm that specializes in the language.

This pay discrepancy, due to the dearth of qualified candidates and the importance of banking systems developed in COBOL, has created a bit of a rift between COBOL specialists and software engineers who work in other languages, said one COBOL programmer currently working at a large bank. “I can tell [younger software developers] see me as a dinosaur doing mostly maintenance,” he said. “But I don’t care. My checks cash just like theirs do.” COBOL’s unpopularity within the development community may stem from a “snob reaction” to the language due to its lack of sophistication, Jean Sammet, one of the original developers of COBOL, once said.

Based on his conversations with the younger IT generation, Hinshaw said he has noticed some anger expressed over the reluctance of firms to move on from COBOL. Younger tech talent wants the “opportunity to replace COBOL with newer technology – and at the same time, demonstrate their programming skills to management,” he said. But with COBOL continuing to run the backbone of many traditional retail services, those opportunities can be somewhat limited, though the influx of technologies like blockchain and AI may soon change the narrative.

Currently, Morgan Stanley, J.P. Morgan and Citi each have over two dozen job openings that list COBOL experience as a requirement. For mainframe-specific jobs, COBOL is mentioned as the first requirement in the majority of job postings. While U.K. firms like Barclays, HSBC and Standard Chartered have no openings that require COBOL, French banks BNP Paribas and Société Générale show 12 and 43 postings, respectively. That may not sound like much, but with the lack of COBOL specialists available and even alive today, banks are unlikely to receive many qualified resumes.

Hinshaw said that there hasn’t been a major effort by universities to teach COBOL, though a few community colleges and military veteran programs in the U.S. have requested instruction. COBOL is also being taught more overseas in countries like Malaysia, where there is less stigma associated with the language, according to Hinshaw. He calls these new recruits “baby dinosaurs” – a nickname COBOL programmers seem to embrace. You can even buy a t-shirt emblazoned with a picture of a dinosaur sitting at a laptop below the words “COBOL programmer.”

Experts have been predicting the demise of COBOL in banking for decades, and one day they may be right. But until then, this select group of “dinosaurs” will continue to have promising career prospects – a unique situation for banking veterans who reach a certain age. Claims of ageism in banking technology is narrative that isn’t going away.

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