"A billion here, a billion there, and pretty soon you're talking real money." A quote attributed to Sen. Dirksen, but no one can prove it.
Today, I would change the quote to "A billion bits here, a billion bits there...." I don't remember the year it happened, but the cost of hardware storage devices that kept enterprise data online, and thus easily accessible, dropped drastically. So naturally, configuration people bought it by the truckloads. And banks were no exception, probably because the custodians of the IT budget didn't have a good handle on what the dollar impact would be because they were using this metric, cost per bit.
Not a problem. The users of the Data Processing Cost Analyst (DPCA) now know there are two line items in their IT budget, heretofore overlooked, and they know the cost of same. They are: 1) closed accounts and really old tired data that seldom gets used, plus 2) redundant customer portfolios resulting from deferred file scrubbing.
I'm not suggesting that these data are totally worthless; I'm simply saying they are worth less than critical real-time data, yet they hog the same storage space because of lazy departmental and IT data management. Hoarding infrequently used data in a real-time environment is an IT crime.
The DPCA calculates, to the penny, the dead data costs. Is it a few billion (never) or a few hundred dollars (more like thousands)? Then the judgment call takes place. For bankers with in-house systems, you own the equipment so you can't save much, other than improved speed and performance as it relates to customer service. For bankers using an outsource service, a quick call to the account rep rectifies the problem. Four words should work: "Archive our dead data."
Rumors are spreading, and getting back to me, that bankers are going beyond the relief fund and government assistance programs in seeking handouts. For failures that had nothing to do with bank tech companies, some bankers are asking tech providers to cut their charges. The rationale is "you should share our losses." I call that begging, and I approve of it for hardship cases, homeless people and several charities. In business, there's another way. It's called presenting the rational business case. Here are the words, "We had a third party independent assessment of our IT costs and the report says we should be spending X dollars. You are charging us Y dollars. Please explain the variance." Before you open Pandora's Box, make sure you know and can defend X and Y.