Palantir to Solve Banking IT Problems: Worth Monitoring

December 21, 2023

This essay is the work of a dumb dinobaby. No smart software required.

Palantir Technologies recast itself as an artificial intelligence company. The firm persevered in England and positioned itself as the one best choice to wrestle the UK National Health Service’s IT systems into submission. Now, the company founded 20 years ago is going to demonstrate its business chops in a financial institution.

A young IT wizard explains to a group of senior executives, “Our team can deal with mainframe software and migrate the operations of this organization to a modern, scalable, more economical, and easier-to-use system. I am wearing a special seeing stone, so trust me.” Thanks, MSFT Copilot. It took five tries to get a good enough cartoon.

Before referencing the big, new job Palantir has “won,” I want to mention an interesting 2016 write up called “Interviewing My Mother, a Mainframe COBOL Programmer” by Tom Jordan. I want to point out that I am not suggesting that financial institutions have not solved their IT problems. I simply don’t know. But my poking around the Charlie Javice matter, my hunch is that banks IT systems have not changed significantly in the last seven years. Had the JPMC infrastructure been humming along with real-time data checks and smart software to determine if data were spoofed, those $175 million dollars would not have flown the upscale coop at JP Morgan Chase. For some Charlie Javice detail, navigate to this CNBC news item.

Here are several points about financial institutions IT infrastructure from the 2016 mom chat:

Many banks rely on COBOL programs
Those who wrote the COBOL programs may be deceased or retired
Newbies may not know how undocumented legacy COBOL programs interact with other undocumented programs
COBOL is not the go-to language for most programmers
The databases for some financial institutions are not widely understood; for example, DL/1 / IMS, so some programmers have to learn something new about something old
Moving data around can be tricky and the documentation about what an upstream system does and how it interacts with a downstream system may be fuzzy or unknown.

Anyone who has experience fiddling with legacy financial systems knows that changes require an abundance of caution. An error can wreck financial havoc. For more “color” about legacy systems used in banks, consult Mr. Jordan’s mom interview.

I thought about Mr. Jordan’s essay when I read “Palantir and UniCredit Renew Digital Transformation Partnership.” Palantir has been transforming UniCredit for five years, but obviously more work is needed. From my point of view, Palantir is a consulting company which does integration. Thus, the speed of the transformation is important. Time is money. The write up states:

The partnership will see UniCredit deploy the Palantir Foundry operating system to accelerate the bank’s digital transformation and help increase revenue and mitigate risks.

I like the idea of a financial services institution increasing its revenue and reducing its risk.

The report about the “partnership” adds:

Palantir and UniCredit first partnered in 2018 as the bank sought technology that could streamline sales spanning jurisdictions, better operationalize machine learning and artificial intelligence, enforce policy compliance, and enhance decision making on the front lines. The bank chose Palantir Foundry as the operating system for the enterprise, leveraging a single, open and integrated platform across entities and business lines and enabling synergies across the Group.

Yep, AI is part of the deal. Compliance management is part of the agreement. Plus, Palantir will handle cross jurisdictional sales. Also, bank managers will make better decisions. (One hopes the JPMC decision about the fake data, revenues, and accounts will not become an issue for UniCredit.)

Palantir is optimistic about the partnership renewal and five years of billing for what may be quite difficult work to do without errors and within the available time and resource window. A Palantir executive said, according to the article:

Palantir has long been a proud partner to some of the world’s top financial institutions. We’re honored that UniCredit has placed its confidence in Palantir once again and look forward to furthering the bank’s digital transformation.

Will Palantir be able to handle super-sized jobs like the NHS work and the UniCredit project? Personally I will be watching for news about both of these contract wins. For a 20 year old company with its roots in the intelligence community, success in health care and financial services will mark one of the few times, intelware has made the leap to mainstream commercial problem solving.

The question is, “Why have the other companies failed in financial services modernization?” I have a lecture about that. Curious to know more. Write benkent2020 at yahoo dot com, and one of my team will respond to you.

Stephen E Arnold, December 18, 2023

Written by Stephen E. Arnold · Filed Under AI, Financial, News, Palantir

Comments

Comments are closed.

Search the site
Subscribe to Beyond Search
Feature archive
News archive

Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.