COBOL- The 66-year-old program that's running world’s biggest banks

Have you ever wondered what powers the banking systems behind your ATM transactions and credit card payments? Well, there is a good chance that a 66-year-old programming language called COBOL is doing the critical heavy-lifting behind-the-scenes. 

While big tech companies globally are pouring millions into hiring artificial intelligence (AI) talent, the world’s biggest banks are looking for COBOL programmers to back the legacy systems that continue to power essential financial transactions. Reportedly, there has been a sudden rise in COBOL specialists among Banks, insurance firms, government departments, and large corporations, and they are ready to pay higher salaries s to attract and retain developers with these skills.

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What exactly is COBOL?

COBOL stands for Common Business-Oriented Language, which was first introduced in 1959 by a group of computer scientists working with the United States Department of Defence. The technology was widely adopted by businesses during that time as it helped manage large volumes of structured data and process records in bulk.

COBOL code resembles plain English, making it easier for business professionals and programmers to read. It is almost like a written instruction saying, “Take the account balance and display it.” COBOL was specifically helpful with tasks such as processing payroll, handling banking transactions, managing customer records, tracking inventory, and processing large amounts of structured data. 

Later, it was widely adopted by banks, insurance companies, and government agencies.

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COBOL: Backbone of global finance

According to reports, about 800 billion lines of COBOL code are still actively used around the world, and it is estimated to handle about $3 trillion worth of transactions every day. These transactions include credit card payments, ATM withdrawals, mortgage payments, insurance claims, payroll processing, government benefits and welfare payments. Therefore, despite being six decades old, it still works as a backbone for the global financial system and continues to support many of the everyday transactions.

The majority of the world's top banks, including JPMorgan Chase, Bank of America, Citigroup, Deutsche Bank and US government organisations, like the Social Security Administration and the Internal Revenue Service, continue to run critical systems using COBOL.

COBOL talent crisis 

COBOL has reportedly come back into the spotlight, as companies are facing challenges to find people familiar with the technology. Many of the people who originally worked with COBOL systems started their careers decades ago, and many of them have come to their retirement age. Due to this reason, companies are at risk for system failures, security issues, costly outages, and delays in modernisation efforts. Companies have also started to bring back retired employees to manage the systems.

Now, most universities and programs focus on modern languages like Python, Java JavaScript and C++. As a result, relatively few young programmers are being trained in COBOL. Now, it is reported that programmers have started to learn COBOL, since there is much less competition for jobs compared with fields such as AI, web development, or app development.

It is also reported that banks have started to experiment with ways to modernise these legacy systems, and many are also exploring AI tools to update legacy COBOL code. Doing so will help today’s programmers to run the system and mitigate the projected risks.