Why do Banks and Financial Institutions still use Mainframes?

The rise of startups, the emergence of new technologies like big data, and faster networks. All of these are making most of us believe that distributed computing is here to replace the age old centralized computing. In other words, with the emergence of cloud and mobile computing, mainframes should soon become an obsolete technology.

Well interestingly enough, mainframes don’t seem to be going out of the picture anytime soon. Ever since the launch of IBM’s first mainframe range in 1964, System/360, mainframes have never seen a dull day in business. Mainframes occupy a coveted place in various fields like banking, healthcare, finance, insurance, government, and a plethora of other public and private enterprises.

Mainframes continue to be a favorite, especially with the banking sector. Major banks and financial institutions have mainframes at the center of their technological strategies.

Do you think why? All this while you were told that the popular storyline is that new technology replaces the old? Thinking what could be the one reason behind such an anomaly?  

Here’s the answer to why banks love their mainframes still.

Reliability

 Mainframes are capable of performing in consonance with their hardware and software specifications. This is to say that they perform without errors. For instance, banks have to do decimal arithmetic with 100% accuracy; they maintain records of millions of transactions per second, globally. It is for uses like these that mainframes are a bank’s first choice.

Availability

Banks can’t afford to have system downtime. A customer unable to check balance or withdraw money from ATM is very likely to change banks. While many computing technologies have tried, none have been successful at replicating the mainframe’s high availability architecture. Mainframes help banks avoid putting that “closed” tag outside ATMs.

Security

Banks deal with a lot of sensitive and confidential information. Security is a non-negotiable concern with them. Mainframes have security built into them from the ground up. Through cryptographic hardware acceleration and secure operating system, mainframes fulfill the critical requirement of keeping the user and internal data protected.

Analytical Speed

Banks cater to ATM operations, credit card usage, management of investment capital, and much more. Each of these operations requires instant response. Currently, with the highest clock speed of 5.5 GHz, mainframes best support the time-critical needs of banks.

Compatibility

Mainframes are compatible with multiple languages such as COBOL, Java, C/C+, FORTRAN, etc.   Scalability: Banking involves millions of customers and transactions in its working. Mainframes offer enormous amounts of processing powers that can handle dynamic scenarios ably.

Integration

Mainframes enable two unrelated pieces of technology to work together seamlessly. It can resolve glitches, if any, without any system shutdown or startup.

More than 70% of banking corporate data still resides on the mainframe. Switching from mainframes to cloud computing poses two major challenges - first, these newer computing architectures are in no way close to the many advantages listed above when compared with mainframe computing. Secondly, such massive ‘re-platforming’ is a costly, disruptive, and an extremely risky path.

When the world’s largest banks choose to trust a particular platform, the mainframe, with their valuable data, it’s worth taking a note of. Mainframes are therefore receiving re-investments from IT leaders so that they can keep delivering the many advantages they offer.

Source: allerin.com