Barclays' IT outage: The curse of ancient systems
Barclays had a calamitous start to February. An unspecified technical issue has led to thousands of customers being locked out of accounts and to payments failing to process. The issue, which was resolved on Sunday but continued for two days, is a stark reminder that the transformation efforts happening across banking are happening for a reason.
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Speaking in 2022, ex-Barclays global markets COO David Ornstein said that despite front-office modernizations, most banks have "30-year-old systems in the back office" and face "significant challenges [when] upgrading them."
Today, Barclays employs hundreds of mainframe engineers working in COBOL, a language over 60-years-old that is notoriously disliked and thus notoriously hard to hire for. At many banks, the oldest and hardest to change code is written in COBOL. The bulk of Barclays' mainframe engineers appear to be in India, while its UK-based mainframe engineers are mostly based outside of London in areas like Manchester or Knutsford.
Perhaps due to the dearth of COBOL talent, Barclays uses the mainframe team as a route for its degree apprentices in an attempt to recruit 'baby dinosaurs.' Multiple members of the mainframe team joined as fresh sixth-form graduates while doing degrees at the Manchester Metropolitan University. Many of its former COBOL experts, meanwhile, have retired.
The cause of Barclays' problem isn't clear and Barclays isn't elaborating. In a comment, the bank simply said that the issue has been resolved. It's not inconceivable, though, that it was related to a move away from archaic infrastructure. Barclays' migration is well underway; this time last year, the bank had already moved 75% of its workload to the cloud.
The cost of failure can be high at an individual level as well as a company level. At TSB, another British bank, CIO Carlos Abarca was personally fined £116k in the past over IT failures in banking services that arose from a poorly handled technical migration. Barclays has promised to compensate people "left out of pocket" by the weekend's events.
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