Bank Watch

A brain drain of IT staff at Charlotte's banks?

The banking sector has had its share of challenges since the financial crisis. Here’s another, according to one expert: a brain drain in tech talent.

I talked about this issue this week with Derek Britton, spokesman for Micro Focus, a company based in England that helps other businesses modernize their core information technology systems. Britton was in Charlotte on Tuesday for a Micro Focus seminar, whose attendees included tech professionals who work for local banks.

In our interview at the Marriott City Center hotel, where the seminar took place, Britton explained that banking and many other industries still rely heavily on a programming language that dates to 1959. That language, COBOL, over the years became widespread in the business world and today runs critical applications for companies, Britton said.

The concern, Britton said, is that tech professionals who understand COBOL and the systems built on it are reaching retirement age at a time when an incoming, younger crop of tech talent has little to no familiarity with the more-than-50-year-old programming language.

Britton said that’s because many colleges and universities are no longer teaching COBOL but, instead, newer programming languages like JAVA and C# (pronounced c sharp). Micro Focus has worked with hundreds of universities to put COBOL back on their curricula to meet demand for the language, he said.

It adds up to perfect storm for the IT world, leading to worries among various industries about a skills gap. But the issue is of particular concern for the financial services sector, where COBOL is used to operate systems that are at the very core of banks’ businesses, Britton said.

“Those systems have become more and more valuable over time,” he said. “The very health of the business relies on these systems.”

Looked at another way – these are systems that, for banks, are too important (and maybe even too big) to fail.

For example, whenever any of us make a deposit at an ATM or transfer money on a tablet device, we’re able to do so in part because of COBOL, Britton said.

Banks are using newer programming languages, too, he said. But they still need people who know COBOL in order to keep their mainframes operating and make updates to systems based on COBOL, he said.

“It’s not hard to image the anxiety a CIO (chief information officer) faces when he’s told that some of his key developers, some of the people who really understand the systems, really know what’s going on ... are reaching retirement age,” he said.

The demand for COBOL knowledge is so high that, according to some studies, a person with COBOL skills on their resume can command on average about $10,000 more in annual pay than a tech professional without it, Britton said.

Wells Fargo and Bank of America, Charlotte’s two largest banks by deposits, declined to comment when I asked them about whether this is an issue affecting them.

What’s the solution for banks?

On the bright side, Britton said, COBOL isn’t complicated (as far as programming languages go, anyway). So, presumably, younger techies could quickly learn it from their older colleagues before they retire from banks.

Some companies have already taken steps to provide such training, Britton said.

“I can’t give you their name,” Britton said, “but one very large U.S. insurer had a brain drain concern.”

“They had a deficiency of certain COBOL programmers in a certain line of business area. They had a glut of other programmers who had (programming tool) Visual Studio and, I think, C# skills. What they did is they basically challenged them to see if they could understand the COBOL systems (and) were able to cross-train themselves in COBOL in a matter of days.”

In another solution, some banks are also outsourcing to other companies to help support their COBOL-based systems, he said.

But Britton said it would also be helpful if companies and higher education worked closely together to ensure that schools are teaching the computing skills financial institutions still need – no matter how outdated those skills may seem.

“One of the other ways organizations need to look at this issue is by partnering more effectively with academia, because obviously it’s going to be through the colleges, through the higher-education institutions, that the next generation of skilled talent could become available.”

(Readers, what do you think? Is there a tech brain drain at Charlotte’s banks? Send me your thoughts at deroberts@charlotteobserver.com.)

Roberts: 704-358-5248;

Twitter: @DeonERoberts

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