Critics argue that these digital upstarts are surging thanks to a small number of novel features that older banks will copy, if they haven’t already. Startups respond with "death by Cobol" a reference to a programming language that still lurks in many of their tech stacks that dates back to 1959.
Death by COBOLThe entrepreneurs behind the digital banks counter that older rivals rely on obsolete tech that may well run on COBOL, a programming language that made its debut in 1959. Even if the banks catch up to where the fintechs were years ago, the upstarts say, their tech will be too clunky to make the leap when the next round of innovation comes along. N26 claims its costs are one-sixth of the incumbent banks because its tech is more efficient and it doesn’t have to support the cost of bank branches. (The COBOL issue is a real problem, O’Neill said.)