43% of banking systems still run on COBOL. Replacing it costs $150M–$500M per bank. The talent pool is aging, and AI conversion tools are just starting to chip away at the backlog.
Somewhere underneath the slick mobile apps and instant payment confirmations sits a core system that might be running on COBOL written in 1978. Not a guess, the language still powers an estimated 43% of banking systems worldwide, according to a 2023 survey by the IBM Z mainframe user group SHARE.
Financial institutions from JPMorgan Chase to the UK's Nationwide Building Society have publicly acknowledged maintaining COBOL-based transaction processing platforms. The code handles everything from ATM withdrawals to check clearing to the nightly batch settlement that moves trillions between accounts.
Replacing it is slow and expensive. A full core-banking modernization project at a mid-sized regional bank runs $150 million to $500 million over three to five years, according to Accenture estimates. That cost, plus the risk of a go-live failure, keeps most institutions on the old stack.
The talent pool is shrinking. The average COBOL programmer is 55 or older, according to a 2024 Micro Focus report. Banks have responded by training younger developers internally and by paying premium rates, $100 to $150 an hour for contract COBOL work, recruiters said.
Some firms are bridging the gap with code-conversion tools. IBM's AI-powered watsonx Code Assistant for Z, launched in 2023, translates COBOL into Java or other modern languages. Early adopters include a handful of European banks that have converted parts of their teller and account-management modules.
Full migration remains distant. The Federal Reserve processed 6.7 billion check payments in 2023, the most recent year with full data, all of which ran through systems that still carry COBOL code at some layer.
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