What is 'Technical Debt' in software development?

Technical debt (coined by Ward Cunningham) is the trade-off between short-term speed and long-term code quality. Like financial debt, it accrues "interest" i.e. the longer it is unaddressed, the harder and costlier it becomes to fix. Examples: hardcoded values instead of configuration files, skipping unit tests for faster delivery, not refactoring complex code. Banks with decades-old COBOL core banking systems carry enormous technical debt — modernization projects (like migrating to microservices) are driven by the need to repay this debt.