Finnish banks face online banking challenges due to outdated IT systems and shortage of programmers

Many Finnish banks rely on decades-old IT systems, which occasionally lead to service disruptions. Recently, Nordean’s online banking experienced temporary losses of customer accounts. How can this happen in banks? Linh Kuivanen, CTO of Samlink, an IT partner for the financial sector, explains that system upgrades are costly and challenging, often resulting in failures. While Nordea is not a customer of Samlink, many other Finnish banks, such as Säästöpankki and Oma Säästöpankki, are.

According to Kuivanen, the widely utilized IBM mainframe, developed in the late 1950s, has been in service at Finnish banks since the 1980s. It excels in processing fundamental banking products like loans and payments but struggles to meet modern demands efficiently. As a result, banks have begun employing newer technologies for improvements. However, transitioning data from legacy systems can cause issues, particularly during account transfers.

Additionally, there is a growing shortage of skilled Cobol programmers—an issue arising from an aging workforce, which primarily shapes the old mainframe technology. This shortage is a significant factor in why banks face challenges in updating their systems.

Recent restrictions in online banking at Nordea, which the bank states are unrelated to the new software implementations, have raised concerns. The IT landscape has become increasingly complex due to previous mergers, making management a challenge. Furthermore, recent cyber threats have intensified pressures on these legacy systems, stressing their performance as banks strive to improve defenses against cyberattacks.

The Economic Committee of the Finnish Parliament will convene to discuss these online banking issues, and regulators have been asked for insights into Nordea’s operations.