Linux Provides Steady IT Foundation for Banks in a Tough Economic Climate

Times are tough in the banking industry. According to the AP, 100,000 bank employees have been laid off over the past two years. Overall, banking industry unemployment has almost tripled and bank stocks have cratered. Even with astronomical bailout money becoming available, banks are looking for ways to consolidate.

Consolidation can be both forward and reverse. The seemingly more positive, “forward consolidation,” is when a bank buys another, gains market share and “market efficiencies.” It’s not all positive as layoffs are a part of this scenario. Consolidating “in reverse” is generally more painful, though, selling off assets, looking make do with less, and, invariably, cutting headcount.

It’s not often the first thing you think about, but technology systems are impacted heavily. New users, different bosses, different business processes. It creates upheaval in IT infrastructure and can leave banks vulnerable.

In this environment, Linux provides a distinct competitive advantage. Linux has zero licensing fees, so pure cost is a key benefit. Linux support can be found at almost any level; from free e-mail and bulletin boards to 24/7 mission critical support via enterprise subscriptions. Banks that are running Linux have an operating system with support for the greatest number of chip architectures, hardware platforms and forms of computing (blades to mainframe). Simply put, Linux is the best common denominator in diverse IT environments. It’s not just the operating system. Coding and porting customized applications, common in banking, is significantly easier on open platforms.

IT departments won’t benefit much from bailout money. They need to make good technology decisions. As I speak to leaders in IT departments at banks lately the anecdotal evidence shows Linux is a key technology component in any consolidation plan.