The financial technology infrastructure running America’s largest city is hanging by a thread. That’s the stark assessment from New York City Comptroller Brad Lander, whose office just released a sobering report detailing how the city’s aging financial information systems are increasingly vulnerable to catastrophic failure.
As someone who’s covered market infrastructure for over two decades, I’ve witnessed technological disruptions from trading floors to central banks. But the scale of risk facing New York City’s financial backbone is particularly alarming. The report, “Neglecting the Basics: The Critical Need to Modernize the City’s Financial IT,” reveals a government running on technological life support.
The Financial Information Systems Agency (FISA) manages the city’s core financial operations through applications averaging 37 years old. Let that sink in. These systems, responsible for processing over $120 billion annually and managing the city’s $115.4 billion budget, were mostly developed when Ronald Reagan was president.
“These are the systems that process over $40 billion in annual payroll, handle over 300,000 contracts, and manage the spending of a $115.4 billion expense budget,” the report states. “If these systems fail, the City cannot pay its workers, vendors, or bondholders.”
The assessment highlights FMS, the city’s primary accounting system, built on antiquated COBOL programming language from 1977. COBOL programmers are increasingly scarce, creating dangerous knowledge gaps. According to the Bureau of Labor Statistics, the average age of COBOL programmers is over 58, with many approaching retirement.
Sources familiar with government IT infrastructure consistently warn about this “technical debt” accumulating across public institutions. Professor Jane Harrison of Columbia University’s School of Public Affairs told me in a recent interview, “Municipal governments face unique challenges in technology modernization—budget constraints, procurement complexity, and institutional resistance to change all create perfect storms for technological neglect.”
The risks extend beyond mere inefficiency. The comptroller’s report warns of three critical vulnerabilities: system failure, cybersecurity weaknesses, and compliance failures. Any one of these could trigger cascading financial disruptions across America’s economic capital.
FISA’s annual budget has stagnated at around $118 million since 2015, despite inflation and the growing complexity of maintaining legacy systems. IT modernization projects typically require substantial upfront investment before delivering long-term savings. The comptroller estimates that comprehensive system replacement could cost between $250-350 million.
The city’s technical landscape resembles a digital house of cards. When FISA suffered a server room cooling system failure last summer, the city narrowly averted disaster by manually transferring operations to backup systems. This incident revealed how even mundane infrastructure problems can threaten critical financial functions.
“The report findings aren’t surprising to those of us working in public sector technology,” says Marcus Williams, former CTO for a major state government now consulting on public sector digital transformation. “What’s particularly concerning about New York City’s situation is the combination of extremely outdated systems with the sheer scale of financial responsibility.”
Financial industry analysts note parallels with banking system modernization challenges. Wall Street institutions spent billions updating legacy COBOL systems following high-profile failures in the early 2000s, but government agencies have lagged significantly behind.
The city’s FMS application exemplifies the problem. Built when Jimmy Carter occupied the White House, it lacks even basic security features found in modern systems. According to cybersecurity experts I’ve consulted, applications this outdated typically cannot implement contemporary encryption standards, multi-factor authentication, or automated threat detection.
Comptroller Lander’s office recommends a three-pronged approach: increase FISA’s operational budget, invest in workforce development and knowledge transfer, and commit to comprehensive system replacement. The report emphasizes that delaying modernization only increases eventual costs and risks.
What makes New York’s situation particularly concerning is how it mirrors technological vulnerability across America’s public infrastructure. The American Society of Civil Engineers consistently gives poor marks to government technology systems, noting they represent invisible but critical infrastructure similar to bridges and water systems.
Michael Tanaka, who leads public sector practice at a major consulting firm, shared with me that “governments face uniquely difficult modernization challenges because systems must remain operational throughout any transition. You can’t just shut down a city’s financial operations for a few months to install new systems.”
The comptroller’s findings underscore how technical debt compounds over time. The longer modernization is delayed, the more expensive and risky the eventual transition becomes. Small problems cascade into systemic vulnerabilities. Skills gaps widen as experienced personnel retire. Security patches become impossible to implement.
New York City’s mayor’s office acknowledged the report’s findings but hasn’t committed to specific funding increases. A spokesperson stated they are “evaluating modernization options within existing budget constraints” – language that suggests comprehensive solutions remain elusive.
For New York residents, businesses, and the millions who depend on city services, the implications are profound. A major system failure could delay paychecks for 300,000 city employees, halt payments to thousands of vendors, disrupt pension distributions, or compromise sensitive financial data.
As we approach 2025, New York City faces a critical inflection point. The technology keeping America’s largest municipal government functioning financially is increasingly unsustainable. The question isn’t whether these systems need replacement, but whether leadership will act before catastrophic failure forces their hand.
