AS/400 in Banking: Why Banks Still Rely on IBM i Systems

Despite rapid digital transformation in banking, many financial institutions still depend on AS/400 systems—now known as IBM i—to run their core operations. From transaction processing to account management, AS/400 continues to play a critical role behind the scenes of modern banking.

What Is AS/400?

AS/400 (Application System/400) is a midrange computer system introduced by IBM in 1988. Over time, it evolved and was rebranded as IBM i, running on IBM Power Systems.

Key characteristics include:

• High reliability and uptime

• Integrated database (DB2)

• Strong security architecture

• Ability to process large volumes of transactions

These features make AS/400 particularly suitable for banking and financial services.

Why AS/400 Is Widely Used in Banking

1. High Reliability and Stability

Banks require systems that can operate 24/7 with minimal downtime. AS/400 is known for its exceptional stability, often running for years without interruption.

2. Secure Architecture

Security is critical in banking. AS/400 offers:

• Object-level security

• Role-based access control

• Built-in auditing features

This makes it well-suited for handling sensitive customer and transaction data.

3. Strong Transaction Processing

Banking systems must process millions of transactions accurately and quickly. AS/400 handles high-volume batch and real-time transactions efficiently.

Key Banking Functions Running on AS/400

Many banks still run the following on AS/400 systems:

• Core banking systems

• Customer account management

• Loan and deposit processing

• Payment clearing and settlement

• End-of-day and batch processing

• Regulatory reporting

These functions require consistency, accuracy, and performance—areas where AS/400 excels.

AS/400 and Modern Banking Integration

Although AS/400 is considered a legacy platform, banks have modernized it rather than replacing it.

Common Integration Approaches:

• APIs and middleware to connect AS/400 with web and mobile apps

• Service-oriented architecture (SOA) for real-time data access

• Payment gateways integrated with AS/400 back-end systems

• Data replication to analytics and reporting platforms

This allows banks to offer digital services while keeping AS/400 as the core processing engine.

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Programming Languages Used in AS/400 Banking Systems

Banks use several programming languages on AS/400, including:

• RPG / RPGLE

• COBOL

• CL (Control Language)

• SQL for DB2

These languages support complex business logic and high transaction reliability.

Modernization Strategies for Banks Using AS/400

Instead of full system replacement, banks often choose:

• Application modernization (refactoring old code)

• Web-enabling AS/400 applications

• Cloud integration for analytics and reporting

• Gradual migration to microservices

This approach reduces risk while preserving reliable core systems.

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Future of AS/400 in Banking

AS/400 (IBM i) is unlikely to disappear anytime soon. Many banks continue to invest in:

• Performance upgrades

• Security enhancements

• API-based integrations

Rather than being obsolete, AS/400 remains a mission-critical backbone in global banking operations.