See things clearly
On New Year’s Eve 2012, late afternoon, customers of three of the UK’s largest banks were unable to withdraw cash or use internet banking - some complaining that account balances were incorrectly showing ‘00.00’.
There can’t be many worse times for such a “glitch” to occur, and the (further) damage to those banks’ reputations must have been considerable. The financial cost was also considerable with, for example, Lloyds Bank setting aside £125 million to “compensate frustrated customers”.
Commenting on this type of incident, Michael Allen of Compuware said it,
"...just shows the impact IT has on all of our lives, which are now so much more digital than they were ten years ago. The consumer is touching and using IT every few minutes, and so when it goes wrong there is a much bigger impact on them and as a result the reputation of the offending organisation."
Already in 2013, across the financial sector, we have seen a continuation of the various types of IT problems that have occurred regularly during the past few years. Here are just a few examples from around the world,
Sweden - The Stock Exchange was forced to shut down trading in derivatives following an order for futures contracts worth 130 times the total of Sweden’s Gross Domestic Product.
South Africa – Delayed transactions by Absa Bank caused SMS purchase confirmation messages to be sent to clients weeks after purchases had been made. As a result, many people believed they had been billed twice, or their accounts had been hacked.
Ireland – A technical problem at the company processing point-of-sale terminals transactions for AIB bank caused up to 80,000 customers to be double-billed for transactions. Merchants were also credited twice.
USA – Three financial exchanges admitted to systems errors resulting in customers not being offered best prices on trades. In two of the exchanges, faults had been occurring for years.
Canada – A ‘country wide processing outage’ of Visa credit card transactions was caused by a power outage at a payment processor’s data centre.
India –Shares in the Bank of India fell 8% after a ‘”freak” trade’ on the National Stock Exchange, and “unintended transactions” at a brokerage caused other shares to lose 10% of their value.
Michael Allen said of the New Year’s Eve incident in the UK banks,
"The problem is that IT systems have become vastly more complex...”
A recent report by Intellect UK, echoes this sentiment,
“the financial infrastructure that underpins each bank and the wider system has reached a critical point in its lifecycle where the fundamental importance of the role it plays in ‘the bank’ is all encompassing, yet the restrictions and challenges it imposes upon the banks can no longer be ignored...
the technology infrastructure across the financial system is exceptionally complex, to the point where it no longer serves many banks, it hinders them.”
During a time of “unprecedented regulatory change and seismic market realignments”, a key issue for finance - whether trading stocks, operating cash machines or processing transactions – is creating more clarity on how the financial system works.
Add a Comment