It is now more than 60 years old. But around 70% of large corporations still rely on the programming language COBOL for much of their mission critical work. And this includes those in the government, banking, finance, insurance, and automotive industries.

Anne-Willem de Vries, co-founder and CEO of Silverflow, tells EPI: “From the outside, it looks as though the payments industry is one that has enjoyed plenty of modernisation and innovation. And, to some extent, this is true. In the past decade, disruptors like Square, Stripe and Paypal have made huge technological improvements to the front end. This has resulted in easy-to-use, sophisticated solutions that enable merchants to leverage the latest payments options on the market.

COBOL: a relic of the 1960s

“However, very little has been done to improve the backend payment processing. This has been running on technology that is older than most millennials. The global financial system hums on an unlikely engine: COBOL, a programming language that is a relic of the 1960s. It powers everything from ATM transactions to stock trades. It has served us well over the years, handling trillions of dollars in transactions without major system failures. But its ongoing prevalence has begun to pose a serious threat to our financial future.”

de Vries adds that COBOL is an innovation dead-end. Combining integrating it with new technologies like open banking, blockchain or AI is near impossible. This stifles creativity and makes it difficult for financial institutions to implement modern features to meet rapidly changing customer demands. Its age also makes it a security risk. Vulnerabilities discovered decades ago remain ripe for exploitation. Modern languages offer robust anti-fraud and security features that COBOL simply can’t match.

Skills shortage – a dwindling pool of programmers

“Compounding these issues, there is a dwindling pool of programmers able to maintain these aging systems. Universities rarely teach COBOL anymore, and younger generations understandably tend to gravitate towards more in-demand and modern languages. This growing skills shortage is a significant risk to the stability and security of financial systems.

“The COBOL crutch we lean on is starting to wobble, and ignoring the issue won’t make it disappear. While there have been calls for an upskilling drive, this is not a sustainable, long-term solution. We need a coordinated, industry-wide effort to migrate critical financial systems away from outdated technologies. As technology providers, we have a duty to show people that there is no need to rely on legacy systems anymore by creating accessible, functional alternatives that are genuinely fit for the future.

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“Tellingly, one of our biggest challenges since launching our cloud-based payment processing platform has been getting customers to believe this technology is real. They often tell us it’s too good to be true, as it’s hard to fathom that – after utilising the same technology for 30-40 years – someone has actually taken the time to build something better that solves these complex issues for them.”

Silverflow raises €15m to accelerate expansion of cloud-based payment processing platform

As co-founder and CEO, Silverflow, de Vries is responsible for product and the overall commercial, financial and operational activities. The Silverflow payment processing platform features a cloud-native solution with a single API to the card networks. de Vries says that its one platform, one connection strategy reduces cost and complexity. In November 2023, Silverflow secured a €15m investment. This was led by industry veterans at Global Paytech Ventures, founded by former Mastercard Europe President, Javier Perez. The latest capital was raised at a valuation substantially higher than its Series A round in 2021.