The year 2019 was a forgettable one for the big banks. Considering the disruptive play by “fintech” and “bigtech”, 2019 should have been the year of technology initiatives, if not breakthroughs. Instead, we got the disturbing findings from the Banking Royal commission, leadership exits at NAB, the outages and the shocking news from Westpac.
Although big banks have embraced a few advancements in banking technology, 2019 is a sad reminder of yet another lost opportunity. Despite GDPR, Open Banking and NPP promising their own benefits, 2019 could be called the year of bank outages.
The big banks collectively had at least half a dozen outages/breaches impacting business as usual. Disruption of a different kind!
NAB leading the pack
National Australia Bank was the highlight in more than one unfortunate way. While NAB business stands out due to the Banking Royal Commission findings and the scathing remarks, the tech folks at NAB were also in the news for the wrong reasons: Outages and data leakage.
NAB suffered data leakage of about 13,000 customers. Chief Data officer Glenda Crisp took responsibility for the data breach and clarified this was a human error. She also didn’t lose any time to point out this was not a cybersecurity issue or weakness.
NAB had 3 major outages apart from the aforementioned data breach. Mobile and internet banking services were impacted twice in January ’19. Some of NAB’s customers had their internet banking accounts blocked and received a text message asking to call the bank. Not to forget, NAB had forked out over $5mn in compensation for an outage in 2018 that had affected businesses who couldn’t trade without cash.
In another outage in the last quarter of the FY ’19, NAB customers were hit by payments glitch. Even as the outbound transactions were affected NAB customers couldn’t use its fast payments service off the New Payments Platform (NPP).
The rise in outages comes even as NAB moves ahead with its tech transformation plan retiring legacy systems and migrating apps to cloud in an attempt to simplify its operations to serve customers better while reducing costs.
Questions have been raised about any links between tech transformation initiatives and the rise in outages. NAB is however clear on the technology focus. It remains to be seen if and how supportive is the new boss.
ANZ Bank customers were subjected to an outage that impacted payroll processing on a Friday afternoon in September. The issue was traced to software and network problems. Pay runs for thousands of customers were affected.
Not to be left behind, CBA had its own outage in October. Some customers reported not being able to pay for lunch or at the supermarket. Some others said they had been left unable to transfer money for fuel.
Many couldn’t directly transfer or receive funds on a Thursday afternoon. The technical outage had been traced to an infrastructure upgrade that affected the bank’s transactions platform.
While it seems Westpac customers haven’t been affected by any major outage last year, the recent news from Westpac is no less embarrassing.
It’s clear the big banks have their tasks cut out. Disruption by not just the “bigtech” innovations (GAFA) but also by the nimble new entrants appealing to a tech-savvy generation is already impacting the big banks’ dominance. The question is will the big banks provide the technology leadership or be led and left behind?
