9 Essential Skills for IT Professionals in Legacy Banking (and How to Find Them)
Behind the sleek mobile apps and digital banking services that consumers see, many banks and financial institutions still run on a foundation of legacy technologies that have proven remarkably resilient despite their age. These systems provide unwavering dependability for high-volume financial transactions, but they also pose a growing challenge as the pool of professionals with the expertise to support them continues to shrink. As a result, technology leaders across the financial sector are competing for a limited number of specialists skilled in decades-old technologies that include mainframe administration, COBOL programming, hierarchical database management, and middleware integration. Without enough skilled personnel to maintain and modernize these systems, banks risk not only disrupting operations but also stalling innovation, making it harder to bridge legacy infrastructure with cloud-native applications and modern banking technologies.
If this sounds all too familiar, you're in the right place! In this article, we'll look at some of the most essential skills for IT professionals in legacy banking, giving you a clear framework for building a technical team that can keep critical systems running while driving modernization initiatives. By understanding what to look for in these professionals and tapping into specialized recruitment channels, hiring managers turn this growing challenge into a competitive advantage.
Why IT Professionals in Legacy Banking Systems Are Essential
Many banks rely on legacy systems to handle critical functions such as transaction processing, risk management, and account maintenance. These core systems are deeply embedded in banking operations, processing massive amounts of data every day while providing stability and security. Although cloud banking systems are becoming more common, many institutions continue to depend on legacy financial systems because they are highly reliable, meet strict regulatory requirements, and store decades of essential banking records. Replacing them entirely is not only expensive but also risky, as migrating large amounts of financial data can create security vulnerabilities and compliance challenges. However, these outdated systems require continuous maintenance, modernization efforts to support new technologies, and regular security updates to mitigate risks and meet changing industry standards.
Skilled IT professionals are essential for maintaining and modernizing legacy banking systems without disrupting operations or compromising security. Without their expertise, banks face costly downtime, regulatory compliance failures, and significant cybersecurity threats. Whether ensuring compliance, optimizing core systems, or supporting the shift to cloud banking services, these specialists play a critical role in maintaining and modernizing the backbone of financial institutions. However, as older workers retire and fewer young IT professionals train in legacy technologies, the talent pool is shrinking, making it increasingly difficult for hiring managers to find experts with the skills needed to keep essential systems secure, efficient, and up to date.
9 Essential Skills for IT Professionals in Legacy Banking
Managing banking legacy systems requires both deep technical knowledge and the ability to adapt to changing financial technologies. These systems power specific banking functions such as transaction processing, regulatory compliance, and data security—core operations that financial institutions rely on every day. However, as technology advances, keeping these systems secure, efficient, and compatible with modern infrastructure has become increasingly challenging. IT professionals need a specialized skill set to maintain legacy environments while integrating them with newer banking solutions. The following are some of the most essential skills that enable IT teams to ensure system stability, support innovation, and keep banking operations running smoothly.
1. Deep Understanding of Core Banking Systems
In the banking industry, legacy core systems power essential operations, from processing transactions to managing loans and accounts. Built for long-term reliability, these platforms are highly complex, deeply embedded in financial institutions, and extensively customized to meet industry needs. However, maintaining them requires specialized expertise, as even minor system failures can disrupt core banking functions and lead to compliance issues.
IT professionals working with legacy systems must be proficient in core banking platforms such as FIS Profile, Temenos Transact, Fiserv, Finastra, and Jack Henry. Their role involves maintaining and customizing transaction processing infrastructure, modifying core system configurations, and ensuring the seamless operation of real-time gross settlement (RTGS) and clearinghouse systems. They also integrate legacy platforms with modern banking technologies and perform security audits to protect sensitive financial data. As financial institutions look to modernize legacy systems, these experts play a key role in keeping critical banking functions running smoothly while minimizing disruption.
2. Proficiency in Legacy Programming Languages
Many institutions in the financial sector still rely on applications built with COBOL, Assembler, PL/I, RPG, Natural/Adabas, and other legacy languages. These languages were designed for stability, efficiency, and high-performance computing in mainframe environments, and have continued to be reliable for decades. For example, although COBOL was created in 1959, it demonstrated its continuing ability to handle high transaction volumes during the COVID-19 pandemic, when a surge in digital payments placed unprecedented demands on financial systems. The 2020 COBOL shortage, which saw multiple state governments struggling to maintain overloaded unemployment systems, highlighted both the continued importance of this skill and the industry's lack of investment in training new developers. COBOL-based applications still power essential banking operations today, including real-time transaction processing, batch processing, fraud detection, and regulatory reporting, making proficiency in these languages critical for maintaining, updating, and integrating legacy banking software.
While modernization is necessary to enhance security, scalability, and compatibility with new technologies, migrations can be costly, complex, and challenging, causing major system disruptions, data migration issues, and even operational failures if not carefully managed. To mitigate these risks, many financial institutions choose to modernize legacy infrastructure rather than replace it entirely, leveraging Application Programming Interfaces (APIs), cloud integration, microservices architecture, real-time processing solutions, and DevOps methodologies to enhance functionality while maintaining long-term stability. IT professionals with both legacy programming expertise and the ability to integrate these newer technologies are in high demand, as they play a key role in preventing data integrity issues, transaction failures, and security vulnerabilities while ensuring that existing legacy systems remain secure, scalable, and capable of delivering the digital banking services consumers expect.
3. Expertise in Mainframe Technologies
Despite advancements in cloud computing and other modern infrastructure, mainframes remain the foundation of banking legacy systems for core processing. These powerful systems process billions of transactions daily, handling real-time payments, loan processing, account management, and regulatory reporting. Banks depend on mainframes not only for their speed, security, and reliability but also because they meet strict regulatory compliance requirements and store massive amounts of data, making them difficult to replace. However, maintaining and optimizing these systems requires specialized expertise, as they must remain both highly efficient and adaptable to integrate with modern banking technologies.
IT professionals working with banking legacy systems must have a strong command of z/OS, IBM’s mainframe operating system, along with JCL (Job Control Language), which is used for job execution and batch processing. Expertise in CICS (Customer Information Control System) is critical for supporting real-time transaction processing (including online transaction processing), while IMS DB (Information Management System) enables hierarchical database storage for high-speed financial operations. Additionally, a deep understanding of batch processing, load balancing, security auditing, and disaster recovery is key to ensuring financial continuity, fraud prevention, and compliance with banking regulations. As financial institutions modernize, professionals who can integrate mainframes with APIs, cloud solutions, microservices, and hybrid architectures while preserving stability and security are in high demand.
4. Database Management and Data Migration Skills
Effective database management and data migration are essential in the financial services sector, where many banking legacy systems still rely on hierarchical databases, flat files, and VSAM (Virtual Storage Access Method) for data storage. While these systems were designed for high-speed transaction processing and reliability, they lack the scalability, flexibility, SQL compatibility, and real-time analytics capabilities of modern databases. As financial institutions transition to cloud banking platforms and data-driven operations, migrating legacy data while ensuring regulatory compliance, security, and minimal operational disruption has become a key challenge.
IT professionals specializing in data migration must be proficient in ETL (Extract, Transform, Load) processes, particularly when moving data from IMS DB, VSAM, and DB2 to modern cloud-based and relational databases such as Oracle, SQL Server, and PostgreSQL. Maintaining data integrity, accuracy, lineage, and compliance throughout the migration is crucial, as financial institutions handle vast amounts of sensitive information. Knowledge of IBM InfoSphere DataStage, Talend, Apache NiFi, and data quality tools such as Informatica Data Quality is highly valuable for automating and streamlining migrations. As banks increasingly adopt cloud banking platforms, expertise in cloud service providers like AWS, Microsoft Azure, and Google Cloud is also in demand. These platforms offer scalable storage, enhanced security, and automated data management and governance solutions, ensuring that legacy data remains accessible, secure, and fully integrated with modern banking applications.
5. Knowledge of Banking Regulations and Compliance
The banking sector is heavily regulated, requiring financial institutions to comply with global and regional laws that govern data privacy, fraud prevention, consumer protection, financial security, and risk management. Regulations such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) mandate strict data protection policies, ensuring that customer information is securely handled, processed, and stored. Meanwhile, KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations require banks to verify customer identities and monitor transactions to detect and prevent fraud. They must also adhere to Basel III, which sets risk management, capital, and liquidity requirements, and security standards like PCI-DSS (Payment Card Industry Data Security Standard), GLBA (Gramm-Leach-Bliley Act), and SWIFT CSP (Customer Security Programme), which establish guidelines for secure financial transactions and data transmission.
IT professionals play a vital role in ensuring compliance by designing, securing, and maintaining banking systems that support data storage, transaction tracking, data encryption, and audit mechanisms. Compliance is also a key factor in business continuity, requiring banks to have disaster recovery plans, redundancy strategies, and risk assessments to prevent disruptions. As regulations change, IT teams must continuously monitor systems, implement automation to reduce compliance risks, conduct mandatory compliance audits, and adapt banking technologies to meet new legal and security requirements. Beyond avoiding penalties, strong compliance practices help financial institutions protect sensitive data, maintain customer trust and expectations, and ensure that banking systems stay secure, resilient, and aligned with industry standards.
6. System Integration Expertise
Seamless system integration is essential for financial institutions looking to modernize their existing systems, as legacy banking systems must connect with cloud banking services, online and mobile banking applications, regulatory reporting systems, and third-party financial platforms to keep up with shifting industry demands. This requires expertise in Open Banking APIs, API management platforms, middleware solutions like MuleSoft and TIBCO, and message brokers such as IBM MQ and Apache Kafka to enable secure, real-time data exchange. These tools synchronize transactions across platforms, facilitate real-time data exchange, and ensure reliable message delivery through queuing and event-driven processing. Additionally, new standards like ISO 20022 provide a more structured and standardized approach to financial messaging, allowing banks to streamline global payment processing and ensure compliance automation with seamless real-time reporting.
A successful integration strategy ensures data flows seamlessly between legacy infrastructure and modern applications while addressing security, scalability, and performance challenges. IT professionals must navigate compatibility issues, data format mismatches, and latency concerns while designing flexible data platforms that can adapt to future business needs. Security measures such as encryption, authentication, authorization, and secure API gateways are crucial to protect sensitive financial data and prevent unauthorized access. Proficiency in application programming enables IT professionals to develop custom integrations, automate workflows, implement fault-tolerant error handling, automated recovery mechanisms, and logging strategies, and optimize system performance, ensuring that financial institutions can utilize modern technologies while keeping their core banking systems secure, stable, and future-ready.
7. Problem-Solving and Troubleshooting Abilities
Working with legacy core banking systems requires strong problem-solving and troubleshooting skills, as these systems are highly customized and complex, deeply integrated into financial institutions and often lacking comprehensive documentation. Unlike modern cloud-based architectures, legacy systems consist of interdependent components that have been modified over decades, making troubleshooting more complex due to limited logging and diagnostic tools. When issues arise, IT professionals must diagnose and resolve them quickly to minimize downtime and ensure uninterrupted banking services. System failures can lead to compliance violations, financial losses, and reputational damage, making the ability to analyze and fix problems a critical skill in banking IT.
Common troubleshooting challenges include debugging batch processing failures, fixing data corruption issues in hierarchical databases, repairing network connectivity issues, and resolving real-time transaction errors in high-availability environments. Unlike cloud platforms, where scalability and redundancy help mitigate failures, legacy infrastructure requires hands-on diagnosis, optimization, and, in some cases, even specialized hardware tools such as diagnostic consoles to maintain system performance. IT professionals must also ensure seamless integration between legacy and modern banking technologies, navigating compatibility issues, data format mismatches, version control issues, and latency concerns. Additionally, advanced monitoring tools and automation solutions can detect anomalies before they escalate, reducing manual troubleshooting efforts and providing detailed logging for post-incident analysis.
A well-rounded problem solver must be able to analyze root causes and implement long-term fixes. Optimizing system performance ensures that financial institutions operate securely, efficiently, and in line with customer expectations.
8. Understanding of Security Protocols and Best Practices
In the financial industry, data security is a top priority due to the high risks of fraud, cyberattacks, and regulatory violations. Banks are prime targets for cybercriminals seeking to exploit vulnerabilities in legacy infrastructure, cloud integrations, and digital banking services. Beyond external threats, insider risks, human error, supply chain vulnerabilities, and system misconfigurations can also lead to data breaches and financial fraud. IT professionals must implement risk mitigation strategies to protect sensitive financial data using encryption standards such as AES, RSA, and TLS/SSL, along with data loss prevention (DLP) solutions to monitor and prevent unauthorized data exposure. Identity and access management (IAM) measures, including multi-factor authentication (MFA) and role-based access control (RBAC), are essential for reducing unauthorized access risks. Additionally, maintaining intrusion detection and prevention systems (IDPS), SIEM solutions, vulnerability management tools, and endpoint security tools is critical for detecting and containing cyber threats before they escalate.
Beyond individual security measures, financial institutions must comply with PCI-DSS (Payment Card Industry Data Security Standard), SWIFT CSP (Customer Security Programme), and global cybersecurity regulations such as GDPR, GLBA, and FFIEC guidelines to ensure the security of financial transactions and prevent data breaches. Beyond compliance, these standards provide a framework for consistent security practices across financial institutions, strengthening resilience and customer trust. As banks increasingly integrate cloud platforms, securing hybrid environments presents new challenges, including misconfigurations, unsecured APIs, data sovereignty issues, and complex regulatory requirements. Additionally, AI-driven threats, such as deepfake fraud, automated phishing, and AI-powered malware, continue to evolve, requiring continuous updates to security defenses and fraud detection systems.
Furthermore, a strong security framework extends beyond prevention and must include rapid incident detection, forensic analysis, recovery strategies, and continuous security monitoring to mitigate financial and reputational damage. Security awareness training for the entire institution is equally crucial, as social engineering attacks and credential theft remain major threats. Effective security protocols and best practices help financial institutions maintain compliance, protect customer data, and ensure business continuity, keeping banking systems resilient against both old and new cyber threats.
9. Adaptability and Willingness to Learn
In a rapidly evolving industry, financial institutions must balance legacy system maintenance with legacy software modernization and new technology to stay competitive and meet customer expectations for seamless digital banking experiences and real-time transactions. As digital transformation reshapes banking, professionals must continuously update their skills to integrate hybrid cloud solutions like AWS, Azure, and IBM Cloud for mainframes, leverage low-code/no-code development platforms such as OutSystems and Mendix, and adopt containerization technologies like Docker and Kubernetes to enhance scalability and deployment efficiency, all while ensuring new technologies integrate smoothly and effectively.
Ongoing professional development is essential for keeping pace with new advancements. Earning IBM certifications, taking fintech courses, attending industry conferences, participating in open-source projects, and staying informed about cybersecurity best practices all help IT professionals remain competitive and adaptable. Financial institutions will benefit by fostering a workforce that can bridge the gap between legacy systems and modern innovations, ensuring smoother transitions and minimizing disruption while reducing time to market for new financial services. Those who embrace adaptability and continuous learning will be best positioned to drive progress in banking technology while maintaining the reliability and security that the financial industry demands.
The Challenge of Finding Legacy IT Talent
The financial industry faces a growing shortage of IT professionals with legacy skills, as many experienced COBOL and mainframe experts retire and few new professionals enter the field. Most universities and IT training programs focus on modern development frameworks and cloud computing, leaving businesses struggling to find specialists who can maintain and modernize their existing legacy systems. Competition for this talent is fierce, with industries such as government, healthcare, and insurance also relying on aging infrastructure. Additionally, many younger IT professionals prioritize roles in emerging technologies, making it difficult to attract talent to positions focused on older systems. The result is longer hiring cycles, higher recruitment costs, and increased pressure on financial institutions to train junior staff from scratch, which is a costly and time-intensive process.
Traditional recruiting methods often fall short when sourcing candidates with niche expertise, and searching for qualified professionals can take months, delaying critical system updates and increasing operational risks. Delays in filling legacy IT roles can lead to disruptions in system reliability, security, and regulatory compliance, putting financial institutions at risk of service interruptions and potential fines. To bridge this gap, organizations must take a strategic approach to hiring, leveraging specialized recruitment solutions to access qualified talent more efficiently.
How a Staffing Agency Can Help
Partnering with a staffing agency specializing in IT for financial services provides institutions with:
Access to a vetted talent pool – Experts in COBOL, mainframes, regulatory compliance, and system integration, ensuring critical roles are filled quickly.
Faster hiring process – Agencies handle screening, skills testing, and interviews, reducing the time and effort required to find qualified candidates.
Flexible hiring models – Options for contract, contract-to-hire, and direct placement, allowing businesses to scale their workforce as needed.
Risk mitigation – Background checks and compliance verification ensure new hires meet industry standards and security requirements.
Industry expertise – Specialized recruiters understand legacy banking IT requirements and match companies with professionals who fit their needs.
Support for modernization – Staffing agencies connect businesses with professionals skilled in both legacy systems and modernization initiatives, helping financial institutions bridge the gap between existing infrastructure and new technology.
Experienced professionals – Access to a wide range of IT professionals in the legacy banking field, including mainframe developers, database architects, security specialists, and integration engineers
Frequently Asked Questions
Why Do Banks Still Use Legacy Systems Instead of Upgrading to Modern Technology?
Many financial institutions continue to rely on legacy systems because they provide stability, security, and regulatory compliance. Full replacement is costly, complex, and risky, especially for core banking operations that require high reliability. Instead of replacing legacy systems entirely, many banks choose legacy software modernization strategies that integrate new technology while keeping critical infrastructure intact.
Which Legacy Programming Languages Are Most in Demand in the Banking Sector?
COBOL, Assembler, PL/I, RPG, and JCL remain highly valuable in the banking industry. These languages power core banking platforms and are essential for maintaining transaction processing, risk management, and compliance reporting. Demand for these skills remains high due to the shortage of experienced professionals and the reliance of major financial institutions on these technologies.
How Can IT Professionals Learn Legacy Banking Technologies if They Have No Prior Experience?
IT professionals can gain expertise in legacy banking technologies through online courses, industry certifications, hands-on training, and mentorship programs. Many financial institutions also provide on-the-job training for COBOL, mainframes, and core banking platforms. Additionally, IBM mainframe training and open-source legacy system simulators can help professionals build legacy skills, while fintech courses can provide insight into integrating legacy infrastructure with modern banking technologies.
What Role Do Legacy Banking IT Professionals Play in Digital Transformation?
Legacy banking IT professionals are critical to bridging the gap between existing infrastructure and new technology. They ensure that legacy systems can integrate with cloud banking platforms, APIs, and AI-driven automation without disrupting operations. Their expertise helps banks modernize while maintaining system stability, security, and compliance.
What Is the Best Way for Banks to Find IT Professionals Skilled in Legacy Technologies?
Due to the talent shortage in legacy IT, financial institutions often turn to specialized staffing agencies that focus on IT for financial services. These agencies provide pre-vetted professionals skilled in COBOL, mainframes, system integration, and security compliance, reducing hiring time and costs. Banks also invest in internal training programs to develop new talent, ensuring continuity in maintaining critical legacy systems.
Conclusion
Legacy systems remain the backbone of global finance, creating both challenges and opportunities for financial institutions. While the nine essential skills outlined above are critical for maintaining and modernizing banking legacy systems, the shrinking pool of experienced professionals makes hiring increasingly difficult. As retirements accelerate and IT education shifts toward cloud-native development, banks risk prolonged vacancies, knowledge gaps, and operational disruptions. Partnering with specialized financial technology staffing firms provides a strategic solution to this recruitment challenge, offering access to legacy IT professionals, from COBOL developers and mainframe specialists to experts in system integration. By leveraging specialized recruitment channels, banks can fill critical roles faster, ensure operational stability, and shift their focus from legacy staffing challenges to future innovation, new technologies, and enhanced customer experiences.
Article Author:
Ashley Meyer
Digital Marketing Strategist
Albany, NY