There is much debate about the drivers for change in the payments systems arena. New technologies spawning new payments channels, global payments continuing to grow, the move away from paper,  market or political initiatives such as SEPA and of course  the current high profile topic of increasing regulation.

 Each of these issues or a combination of them are playing a significant role in the changing landscape of payments processing and are pretty well understood. I have been considering for some time now what I would call the biological time bomb that is now (and in some cases already has) about to have considerable impact on decisions around systems replacement.

This time bomb could also be called “old Fred is about to retire”. So who is Fred? Every company has its Fred. Fred knows how to operate the printer. Fred knows where the light bulbs are. Fred is the keystone of operations. 

In the case of legacy payment applications, Fred also is the person that supports the old languages, such as Assembler, COBOL or TAL. He is also the walking history of the system. He knows why and how the system does what it does. Often this is not documented anywhere.

We all know the problems with legacy applications poorly documented code, poor or non-existent systems documentation and a diminishing number of experienced staff. It’s not just age and impending retirement that exacerbates this issue but also career development and promotion.

Banks have tried to develop these skills in young folk, but in the days of .Net and Java, iPads and apps there is not much going for legacy technologies. Banks need their business capabilities and critical systems to be independent of an individual’s knowledge. This is why they require adaptable and well-documented systems built by people who can interpret the bank’s needs in a modern world.

So if there is a move to leave well alone, remember there is a bomb gently ticking away in the background.  Fred won’t be around forever.