TSB bank is taking a lead among its rivals by planning “extensive” use of Linux for its various systems.
Other New Zealand banks may be set to follow, with the Auckland-based ASB saying it is investigating the use of the open source operating system.
ASB director of operations Clayton Wakefield (pictured right) says he expects Linux will become a contender for banking systems within a few years because of what he calls “concerns” over Microsoft’s licensing policies.
Taranaki-based TSB’s first Linux installation is an image capturing system from Australasian payment processing specialist Prismac that will be used to speed up the processing of cheques.
TSB’s Linux installations are being coordinated by IT manager John Hollins, who was reluctant to comment on the move, saying that there is nothing yet for people to see. He confirms that the bank is using Linux for the development of the image capture system and eventually for other systems in the network. “Where we install Linux has yet to be decided [but] we will have extensive use of Linux eventually.”
The TSB expects it will need new hardware as it switches over to Linux and replaces an existing CTOS system from Unisys at its branches. Hollins says the “cost of licences was one factor, not the only factor” in moving to open source, but declined to comment further.
The ASB’s Clayton Wakefield described the TSB move to Linux as “understandable”.
“Linux is becoming a contender for operating systems. That will become more so over the next two to five years. Given some of the concerns over Microsoft licensing, that will see a rise in competition and Linux will be part of that competition.”
Wakefield says the ASB sees Linux as an option for its own future. “We are already doing preliminary investigation into Linux, like a lot of things on the market.”
He says Linux is a “maturing” technology which will be undergoing testing at other banks.
Taking a more conservative approach is Massey University banking expert David Tripe, who describes the TSB’s shift to Linux as “brave”.
He says Linux will offer some cost savings in principle, but since fewer people use it systems could be harder to repair if they fail.
“Certainly I am not aware of any other banks using Linux. I am surprised TSB has done it. Maybe they have confidence. If you are doing it for enough applications where you have enough backup and confidence other people are doing it, then it’s not so risky. To switch one of the big banks over [to Linux] would be a risky challenge,” Tripe says.
Tripe says the other banks will see the TSB as a small bank taking a risk. “The standard approach of banks is to avoid risky technology so they will use Windows/Intel/Microsoft. They may not be wonderful but if they go wrong there are many people around to fix them,” he says.
A spokeswoman for ANZ says it does not use Linux, and has “no intention of shifting to it in the short term”.
National Bank declined to comment.
The TSB’s image capture system is expected to go live in February.