Modernizing Legacy Banking Infrastructure: COBOL Logic to TypeScript Components

Legacy banking systems aren't just old; they are undocumented liabilities running on the fumes of tribal knowledge. While $3.6 trillion in global technical debt looms over the financial sector, the standard response—the "Big Bang" rewrite—has become a graveyard for CTOs. With 70% of legacy rewrites failing or exceeding their timelines, the industry is paralyzed by the "archaeology" phase: the months spent trying to figure out what a COBOL-based mainframe system actually does before a single line of modern code can be written.

TL;DR: Modernizing legacy banking requires moving from manual code archaeology to automated visual reverse engineering, reducing screen migration time from 40 hours to 4 hours using Replay.

The High Cost of Manual Archaeology in Modernizing Legacy Banking#

The average enterprise rewrite takes 18 to 24 months. In the banking sector, this timeline often doubles due to the complexity of regulatory compliance and the sheer density of legacy business logic. The primary bottleneck isn't writing the new code; it’s understanding the old code.

Currently, 67% of legacy systems lack any form of up-to-date documentation. When a bank decides to move from a green-screen terminal or a legacy JSP application to a modern React-based stack, they typically assign a team of senior developers to "read" the legacy source code. This is a mistake. Reading COBOL or 20-year-old Java to understand business requirements is like trying to reconstruct a blueprint by looking at individual bricks.

The Modernization Matrix: Comparing Strategies#

💰 ROI Insight: Manual extraction costs approximately $4,000–$6,000 per screen in developer hours. Replay reduces this to under $500 by automating the documentation and component generation process.

Why COBOL-to-TypeScript Migrations Fail#

In the context of modernizing legacy banking, the gap between COBOL logic and TypeScript components is more than just syntax; it's a paradigm shift. COBOL relies on global state, fixed-length records, and implicit business rules embedded in

loops. TypeScript expects modularity, type safety, and stateless components.

When developers attempt to manually port this logic, they hit three walls:

1. •The "Shadow" Logic: Rules that exist in the code but aren't documented in any PRD.
2. •Data Mapping: Converting EBCDIC-based mainframe data structures into clean JSON/TypeScript interfaces.
3. •State Management: Mainframes handle session state differently than modern web browsers.

⚠️ Warning: Attempting to rewrite banking logic from source code alone usually results in "Feature Drift," where the new system lacks 10-15% of the edge-case handling present in the legacy system.

The Solution: Visual Reverse Engineering with Replay#

The future of modernization isn't rewriting from scratch—it's understanding what you already have by observing it in action. Replay treats the user interface as the "source of truth." By recording real user workflows within the legacy banking application, Replay captures the exact data inputs, state changes, and API calls (or terminal screen updates) that occur.

Instead of spending weeks in "archaeology" mode, Replay converts these recorded sessions into documented React components and TypeScript interfaces.

Step 1: Record the Workflow#

Instead of reading COBOL files, a subject matter expert (SME) performs a standard banking task—such as "Open New Savings Account"—while Replay records the session. This captures the "as-is" state of the application, including hidden validation rules and conditional formatting.

Step 2: Extract Logic and Data Contracts#

Replay’s AI Automation Suite analyzes the recording to identify the underlying data structures. It generates API contracts that mirror what the legacy system expects, ensuring that the new frontend will be compatible with existing backends during the transition.

typescript
// Example: Generated TypeScript Interface from a Legacy Mainframe Record
// Extracted via Replay from the 'Account Inquiry' workflow

export interface LegacyAccountRecord {
  accountNumber: string; // PIC X(10)
  routingNumber: string; // PIC X(09)
  accountType: 'S' | 'C' | 'M'; // S=Savings, C=Checking, M=Money Market
  currentBalance: number; // PIC S9(9)V99 COMP-3
  lastTransactionDate: string; // YYYYMMDD format
  isOverdraftProtected: boolean;
}

/**
 * 📝 Note: Replay automatically maps COBOL PIC clauses 
 * to modern TypeScript types during the extraction phase.
 */

Step 3: Generate Modern React Components#

Once the data layer is understood, Replay generates functional React components that mimic the behavior of the legacy screens but utilize a modern Design System. This moves the project from "Research" to "Implementation" in days, not months.

tsx
// Example: Modernized Banking Component generated by Replay
import React, { useState, useEffect } from 'react';
import { Button, Input, Alert } from '@/components/ui-library';
import { LegacyAccountRecord } from './types';

export const AccountDetailView: React.FC<{ accountId: string }> = ({ accountId }) => {
  const [data, setData] = useState<LegacyAccountRecord | null>(null);
  const [loading, setLoading] = useState(true);

  // Business logic preserved: Validation for 'M' type accounts
  const validateWithdrawal = (amount: number) => {
    if (data?.accountType === 'M' && amount > 5000) {
      return "Money Market accounts require manual override for withdrawals > $5k";
    }
    return null;
  };

  return (
    <div className="p-6 bg-white rounded-lg shadow-md">
      <h2 className="text-2xl font-bold mb-4">Account Inquiry: {accountId}</h2>
      {/* Replay-generated form fields based on legacy terminal positions */}
      <div className="grid grid-cols-2 gap-4">
        <Input label="Balance" value={data?.currentBalance} readOnly />
        <Input label="Account Type" value={data?.accountType} readOnly />
      </div>
      {/* ... */}
    </div>
  );
};

Bridging the Documentation Gap#

The most significant pain point in modernizing legacy banking is the "Black Box" effect. Senior architects often fear touching legacy code because they don't know what will break. Replay solves this by providing a Technical Debt Audit and automated documentation for every screen it processes.

• •Flows (Architecture): Replay visualizes how data moves between screens, creating a map of the application's architecture that hasn't existed for decades.
• •Library (Design System): It identifies recurring UI patterns across legacy screens and consolidates them into a reusable React component library.
• •Blueprints (Editor): Architects can tweak the extracted logic before it's finalized, ensuring that any "legacy quirks" are either preserved or intentionally refactored.

💡 Pro Tip: Use Replay’s "Blueprints" to identify redundant fields in legacy forms. Many banking screens contain fields that haven't been used since the 1990s; Replay's usage analysis flags these for removal.

Security and Compliance in Regulated Environments#

For Financial Services and Insurance, "the cloud" isn't always an option for sensitive modernization projects. Legacy systems often house PII (Personally Identifiable Information) that cannot leave the internal network.

Replay is built for these high-security environments:

• •SOC2 & HIPAA Ready: Adheres to the strictest data handling standards.
• •On-Premise Available: Can be deployed entirely within your air-gapped environment or private VPC.
• •PII Redaction: Automatically masks sensitive data during the recording and extraction process, ensuring that developers only see the structure of the logic, not the actual customer data.

Case Study: From 18 Months to 6 Weeks#

A major regional bank was struggling to modernize their commercial lending portal. The original system was a mix of ASP.NET and mainframe integration. Their initial estimate for a manual rewrite was 18 months with a team of 12 developers.

By using Replay, they:

1. •Recorded 45 core user workflows in 2 days.
2. •Extracted the underlying business logic and API contracts automatically.
3. •Generated a full React component library that mapped directly to their new Figma design system.
4. •Result: The first version of the modern portal was in UAT (User Acceptance Testing) within 6 weeks.

📝 Note: The bank saved an estimated $1.2M in developer salaries and avoided the common "feature parity" bugs that plague manual rewrites.

Frequently Asked Questions#

How does Replay handle complex backend business logic?#

Replay focuses on the "Observability" of the system. While it doesn't read the COBOL source code on the mainframe, it records the inputs sent to the mainframe and the resulting outputs. By analyzing these patterns, Replay generates a "Black Box" test suite and API contracts that ensure your new TypeScript frontend interacts with the legacy backend perfectly.

What about business logic preservation?#

Because Replay captures the execution of the application, it documents exactly how the system behaves in the real world. This is often more accurate than the source code itself, which may contain "dead code" that never executes. Replay ensures that every validation rule and edge case seen in the recording is reflected in the generated documentation and TypeScript logic.

Does this replace our developers?#

No. Replay is a "Force Multiplier." It removes the 70% of the work that developers hate—the manual archaeology, the tedious documentation, and the boilerplate component creation. This allows your senior engineers to focus on high-value tasks like system architecture, security hardening, and new feature development.

How long does the initial setup take?#

Replay is designed for rapid deployment. In most enterprise environments, we can have the platform running and the first screens being extracted within 48 hours of deployment.

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Ready to modernize without rewriting? Book a pilot with Replay - see your legacy screen extracted live during the call.