Sunday, May 21, 2017

Simon Black: I never knew how screwed up global banking was until I started my own bank

Despite massive profits banks use ages old technology leading to massive security risks. All the money goes to bankers bonuses.


After so many run-ins with the bitter incompetence and bureaucratic indignity of the banking system, I decided once and for all that I would start my own bank.
The deeper I went, the more overwhelming my discoveries of how shockingly inept, obsolete, and out of touch the industry is. 
It’s one thing to read about it in the headlines. It’s quite another to experience it first hand as an insider. 
Here’s a great example: you know how it seems commonplace these days to hear about banks getting hacked? Well, there’s a very good reason for that. 
Every bank runs on something called “core banking software”, which is sort of a central financial database that keeps track of all accounts and transactions.
Core banking software is the most critical component of any bank’s technological infrastructure. 
Yet ironically, the software that many of the most established banks use was originally written in either Fortran or COBOL, both 60-year old programming languages that date back to the late 1950s. 
SWIFT is a worldwide banking network that links allows financial institutions to send and receive messages about wire transfers and payments.
SWIFT is absolutely critical to global banking and handles billions of transactions and messages each year. 
So you can imagine my surprise when I found out that SWIFT runs on Windows Vista an obsolete operating system that Microsoft no longer supports. 
When my bank received its SWIFT code, we were told that we had to have a computer running Vista in the office in order to connect to SWIFT. 
It was such an absurd exercise to find an obsolete computer running an obsolete operating system to connect to the supposedly most advanced and important international payment network in the world.

The Screwd Up Banking Sector

3 comments:

Matt Franko said...

Shocking....

Neil Wilson said...

Hope they patched SWIFT against wannacry

Tom Hickey said...

I would not take "Simon Black" (pseudo-name) as an authority on anything.

I doubt that SWIFT is that open to attack.

It has been breached but that is rare.