The IT department informed Citicorp's president of the y2k problem only in 1995 (INVESTORS BUSINESS DAILY, Feb. 12, 1997). Yet in the 1970's, some senior managers in some banks and insurance firms knew about y2k. How did this information not get to the biggest banks? That is the greatest mystery of all.
Here is one programmer's account.
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How old is the Y2K problem?
Up to 1976 I worked as Support Manager in the Financial Software and Services Department of a large hardware supplier/manufacurer. We supplied software and services to Banks, Insurance Companies and other finance related industries.
From 1970 onwards it became clear that there were serious problems ahead. In those days, 30 year mortgages were fairly common and repayment/interest calculations were affected even then. Senior management in the company, while acknowledging a problem existed, decided it did not warrant serious attention. Many senior managers concluded, correctly as it turned out, that they would either retire of leave the company before the problem reached critical mass. Banks were advised to create their long term loans with 'balloon' payments due in 2000, with the assurance that "real soon now" a solution would be available.
I have long since left the area of software but still work with Banks and Insurance Companies, advising on strategic application of Information Technology. My clients are all located in Asia and the Middle-East. Many are still using solutions purchased in the 70's.
I do not specifically address the Y2K problem, but I am certainly conscious of the fact that many of my clients are either just waking up to Y2K or, in some cases, blissfully (deliberately?) unaware.
At a few of the Banks I work with the balloon payment solution is *still* in use. Even with all the publicity, all the calls for attention on my part, many seem to think the problem will resolve itself somehow. Most are 'evaluating' new packages, forgetting that installation takes time, probably more time than they have left. Implementation assistance will be very hard to come and expensive by as everybody will need it at the last minute.
An insurance company I work with is offering their clients discounts to re-negotiate their policies effective Jan 1, 2000 as there is no time left to re-write the programs. The source code for the extremely complex re-insurance program this company uses is not available and there is no time left to convert and install new software. Oh, and incidentally, some of their software fails with a policy due date of Sept 9. 1999. The date is stored as a 'packed decimal', 9999. This value is used as the 'end of file' indicator in the programs!
Anther wrong perception is that only the "large" banks face a serious problem. Well, if I was a "large" bank, I would worry about the "small' banks. If enough of them run into serious problems, can the "large" banks keep the financial system going? I think there could be a run-on effect where enough "small" failures would drag down the "large" banks as well.
Paul J. Willemse