Mainframes have been around since the 1940s. Over 80 years on, the mainframe remains the system of record for over 5,000 enterprises globally. According to Steven Dickens, vice president of growth and business development at Futurum Research, said that the current generation of mainframes is very different from its predecessors, incorporating on-chip AI and having the ability to run Linux at scale and deliver environmental savings.
That said, the combination of business priorities, preferences, available technologies – hardware, software and services – and other conditions, has resulted in some businesses modernising their computing strategy either through legacy mainframe modernisation projects or outside migrating off the mainframe.
Dicks notes that 2022 has been the year of mainframe modernisation with the likes of AWS, Microsoft, and Google as well as a raft of software vendors bringing solutions to market or repositioning existing solutions as tools to ‘modernise’ mainframe workloads by re-platforming them to the public cloud.
About the FCA
The UK Financial Conduct Authority (FCA) works to ensure that markets work well for individuals, businesses, and for the economy. The FCA does this by regulating the conduct of around 50,000 businesses, prudentially supervising 48,000 firms, and setting specific standards for about 18,000 firms.
TSB Bank failure – what happened
The TSB Bank was created by divestment from Lloyds Banking Group (LBG) in June 2014. Following the divestment, TSB received its core IT services from LBG, using the LBG IT Platform. Following TSB’s acquisition by Sabadell in 2015, TSB undertook to migrate its core IT to Sabadell’s IT banking platform – Proteo, developed in Spain.
Between 2015 and 2018, TSB undertook a major IT change programme, involving the design, build and testing of the new Proteo4UK Platform and associated IT systems, followed by the migration of TSB’s corporate and customer services onto the new platform.
The update of the IT systems and data migration for its corporate and customer services to the new IT platform was conducted in April 2018. While the data was successfully migrated, the platform immediately experienced technical failures impacting 5.2 million customers. This resulted in significant disruption to the continuity of TSB’s banking services, including branch, telephone, online and mobile banking.
In the FCA report published on 20 December 2022, it was revealed that the failed core-banking migration resulted in 225,492 complaints between 22 April 2018 to 7 April 2019, following disruptions that impacted all of TSB’s 550 branches. TSB paid out £32,705,762 to customers under a redress program.
In addition, the FCA and the Prudential Regulation Authority (PRA) fined UK challenger bank TSB fined US$62m (£48m) on 20 December 2022 for a botched core banking migration in a major disruption for customers back in 2018.
Lessons learned
Dickens says for customers looking at re-platforming and re-factoring the biggest takeaway from the 155-page FCA report, is the need to undertake detailed and thorough planning with the utmost skill and execution to pull it off successfully.
Dickens spoke to a Belgian insurer that completely decommissioned its 6,000 MIPS mainframe following a divestiture from a parent company that had a variety of systems running on a mainframe.
He noted that the CIO of the Belgian insurer repeatedly used the word “nightmare” during the discussion. This suggests that TSB is not alone in finding the migration project challenging.
“The TSB migration project involved 85 subcontractors and took almost three years to come to the fateful day when the banks switched over. Despite multiple board-level reviews and third-party project audits, the project failed spectacularly and led to chaos for customers, a huge business impact, and a CEO having to step down as a direct result of the failed project and the fallout."
Steven Dickens
Why jump off the mainframe wagon
Despite the apparent progress the mainframe platform has made, especially over the last decade, Dickens opined that for many smaller customers the case for remaining on the platform is increasing in question as microservices-based options on the public cloud become more robust and secure.
“Mainframe migrations are possible and are able to deliver savings is executed flawlessly. The underlying tech stack required to move a mainframe workload to the public cloud is at a level of technical maturity we have not seen before, and I expect more customers to migrate. What I also expect is that we haven’t seen the last epic-scale failed project,” concluded Dickens.
