Do you seriously suggest that banks outsource the maintenance of the mainframes that process their money transfers? If so I'd like to see a source, because the only articles I have read about on this topic (e.g. [0]) tell me the exact opposite: it's all in-house the risks are too high. For larger banks it's practically a national security risk. Maybe the software they use is from abroad (usually ancient IBM shit), but that's not the same.
Yes, they do; I won't name names because it's from personal experience, but I've seen all maintenance of the core banking system outsourced (e.g. to IBM), I've seen the development/maintenance of the core banking system (which many banks buy from outside vendors, most banks do some customization but many have a commercial system as the base, not some unique fully home-grown solution) go to heck because the vendor moved most of their maintenance from the existing (presumably expensive) teams to cheap overseas engineers which weren't very effective for various reasons; I've also seen banks doing offshoring without outsourcing (i.e. make up an IT department in a 'cheap' country where they don't really do banking) and outsourcing without offshoring.
It's definitely not the case where it's all in-house. Some organizations do, some don't, and there are so many banks (and so many different types&sizes of banks) in the world that every option is represented.
I should have been more specific: When I wrote "maintenance" I was thinking more of "the people in charge of keeping things running on a daily basis and who solve crisis situations". Of course I don't believe that banks build all of their computer systems from the ground up themselves.
But even after narrowing it down to that your stories make me think I had too much faith in the banking system.
Again, I would like to see a source. I'm not saying you're wrong. Maybe you're talking about small banks in the US or something, of which I know basically nothing. I am thinking of examples like Nordea, the bank in the article I linked, which has a market share of around 20% in Sweden[0] and handles the government's bank accounts. Especially that last part makes me extremely skeptical that the Swedish government would be OK with handing over the keys to their economic kingdom to cheap digital labor abroad so a company might save some money.
> Especially that last part makes me extremely skeptical that the Swedish government would be OK with handing over the keys to their economic kingdom to cheap digital labor abroad so a company might save some money.
Well, to begin with, the Swedish government seems to have known for a rather long while that Nordea has been doing quite a lot of other shady shit abroad, and still stuck with them... From your own WP cite, a bit further down: https://en.wikipedia.org/wiki/Nordea#Scandals .
Not that the Swedish government is much of a guarantor against sending sensitive data abroad in the first place: They were quite OK with the Swedish Transport Agency letting a contractor (Oh look, IBM again!) hand over data, including higly secret (protected identities, military vehicle registry, security van routes and timetables) to sub-contractors abroad with no Swedish security clearances: https://simple.wikipedia.org/wiki/Swedish_Transport_Agency%2... (very cursory article; much more in the Swedish-language version). So them trusting Nordea... Isn't much of a recommendation for Nordea either.
The link in your earlier post seems dead, but if we're talking about Nordea specifically (coincidentally, I have worked there many years ago), partial IT outsourcing has always been an option, it has had thousands of external IT consultants, it has used a number of core systems from external vendors in its many banks (in such multinational organizations it's often not that simple to draw boundaries where a department or region or acquisition is often doing things differently with different systems or processes), it had a very large strategic outsourcing deal to IBM in 2017-2019ish, etc.
If you're extremely skeptical that the Swedish government would be OK with handing over the keys to their economic kingdom to cheap digital labor abroad so a company might save some money, then you need to re-evaluate your mental model, because that is definitely happening in reality. They may impose some legal limitations - the exact same limitations as towards any other bank - but they generally act as a normal minority shareholder, demanding the company to be cost-efficient and maximizing profit even if it means outsourcing and offshoring.
Well my brother worked in BNY Mellon India center. They have thousands of people and work core banking processing. BofA have their own India development center with thousands of employees. And this is outside of 10s of thousands outsourced to Tata, Infy etc.
You think core banking process like transfers/ trading is some kinda crown jewel. It may be in terms of messaging but most of core IT part is just a cost center.
Customer data and all need to be in their own secure data centers for legal reasons but all the processes can be designed, developed and executed from anywhere at lower cost.
