By late 2014 I’d finally had enough.
After so many run-ins with the bitter incompetence and bureaucratic indignity of the banking system, I decided once and for all that I would start my own bank.
I probably should have had my head examined, but instead I called one of my attorneys to talk through the options.
Had I known then what I know now, I think I still would have made the same decision… but in total honesty I was completely unprepared for the torrential shit storm I was about to enter.
The deeper I went, the more overwhelming my discoveries of how shockingly inept, obsolete, and out of touch the industry is.
It’s one thing to read about it in the headlines. It’s quite another to experience it first hand as an insider.
Here’s a great example: you know how it seems commonplace these days to hear about banks getting hacked? Well, there’s a very good reason for that.
Every bank runs on something called “core banking software”, which is sort of a central financial database that keeps track of all accounts and transactions.
Anytime you deposit or withdraw funds, the core banking software updates its records.
And whenever you log in to your bank’s website to check your account balance, the server relies on the core banking software for that information.
Core banking software is the most critical component of any bank’s technological infrastructure.
Yet ironically, the software that many of the most established banks use was originally written in either Fortran or COBOL, both 60-year old programming languages that date back to the late 1950s.
Back then banks were very early adopters of technology and jumped on the chance to automate their core functions.
As technology improved, banks continually patched and updated their systems.
But they eventually ran into limitations in terms of how much they could modernize the software.
In the software industry, developers recognize this limitation…