When one realizes that in January 2021, some major financial institutions are still settling transactions via CSV files sent on basic FTP, the scope of the problem becomes clear!
<< laughs with tears and a devilish look in eyes >>
Regardless of the fact that most of the banking sector is still stuck on IBM mainframes from the 60s-80s running COBOL:
I have seen accountants who's only job it was to come in every day and do the same sums on Excel.
I've seen people insisting on a calculator and a printout so that they could sum up columns of an Excel table and send the results back via email.
There are valid reasons to move slowly. Transition costs to new systems are usually immense and the process is a nightmare for banks, but none of what I described fell into that category. It was just people refusing to change their ways. A report for treasury could've been instantaneous with a super simple live updating dashboard. But no. Instead, the CEO got an Excel file emailed to them every week that was put together by 40 people – many of whom entered the numbers manually.
In the industry we have come to call people involved in these tedious processes "hamsters", because they might as well be going up and down the escalator all day.
I don't think many people understand how excruciatingly slow banks move and how inefficient they are.
/cathartic rant over
Edit: (I should add for context that this was a fairly large bank in continental Europe)
Certainly, there are many inefficiencies in banking (and other industries that have been around forever). And the mismatch between trading and settlement here obviously caused some problems (note, though, only at the hip fintech brokers, not at the old fashioned brokers that insist that your trades in a cash account settle before you trade again).
However, may I suggest that the better solution to this mismatch is not to speed up the settlement infrastructure (well, that too, to an extent), but to slow down trading??
A couple of auctions every day instead of continuous limit order book trading and a Tobin Tax on trades would eliminate a lot of rent seeking, simplify lots of things, and hardly affect the fundamental functions of the capital markets at all (maybe improve them).
I'm pretty sure we broke one of our bank client by telling them that data import will be exclusively with SFTP. We ended up allowing FTP (and thus our security certification was voided).
It was a Euro bank though, but it was barely two years ago.
Tons of businesses exchange data like this (e.g. drop ship product availability, etc). Platform independent and easy to read over if things go wrong. I don't see the issue.
I still use wooden sticks for roasting marshmallows. That tech stack is ancient! Can you elaborate on your objection to CSV for record transmission? What would you suggest as a replacement?
Could you please stop posting swipes and flamey comments to HN? You've been doing it a lot lately and it's not what this site is for, no matter how annoyed you may feel about some of what you see here.
