Top Banking Software Failures of 2023 Unveiled
Published on 18/03/2024
Expanding on the theme of why software escrow is pivotal to the Banking industry, we take a deeper look at the issue of Dependence from recent banking software fails.
Issues within a bank's software infrastructure can present formidable obstacles, causing disruptions to the everyday routines of its clientele. Presented below are notable instances of software failures that unfolded during the year.
Bank of Ireland Software Fault Let Customers Withdraw Money They Didn’t Have!
On the 15th of August 2023, a Bank of Ireland software fault enabled customers to withdraw funds they didn’t possess. The bank addressed a "technical issue" that not only allowed transfers surpassing customer limits but also temporarily disrupted its online banking and mobile app services. This triggered an unusual surge in activity at numerous machines in Dublin and beyond. Despite service restoration overnight, customer balances remained inaccurately updated, with online banking functionality remaining disturbed. Social media channels echoed concerns about the inability to verify monthly rent or mortgage payments, accidental overdrafts, and challenges in accessing support services for repayment plans. Revolut disclosed significant transfers into select customers' accounts from Bank of Ireland. Amid the Bank of Ireland outage, several customers reported on social media their ability to transfer funds into their Revolut digital banking app and subsequently withdraw them from ATMs.
11 Japanese Banks Suffer Disruption Due to Software Fault in Money Transfer System
It took two full days to resolve a fault in the nationwide data communication system that handles interbank settlements. The fault occurred on October 10th, 2023, and affected the customers of 10 financial institutions countrywide.
The Zengin interbank data communication system in Japan experienced disruptions, impacting over 1.4 million interbank money transfers involving 10 banks, including major institutions such as MUFG Bank, Resona Bank, and Shoko Chukin Bank, as well as various regional banks. Approximately 400,000 payments were delayed, according to reports from the system's operator. This incident has left the Payment Clearing Network of Japanese Banks uncertain about the cause and duration of the issue, marking the first time customers have been affected by a system problem since the network's establishment in 1973. The problem is attributed to a defect in a relay computer that connects the Zengin system with each financial institution. In response, the operator implemented alternative methods to manage the disrupted transactions by the end of the same day.
Customers Encounter Challenges With Deposit Delays At Major American Banks
In November, customers of major banks, including Bank of America, Chase, Trust, U.S. Bank, and Wells Fargo, experienced delays in receiving direct deposits due to an industry-wide processing issue. The Federal Reserve identified a problem with the Electronic Payments Network, a private sector operator for the Automated Clearing House (ACH), responsible for processing transactions.
The issue stemmed from a processing error in an ACH file the previous night, which was attributed to a manual error associated with the file. Banks acknowledged the situation through statements, indicating their awareness of the industry-wide technical problem affecting some deposits on that day. However, specific details about the nature of the complaints were not provided on the reporting site.
Source : Bank of America warns of banking industry deposit delays | CNN Business
DBS Bank Experienced A Series Of Digital Banking Disruptions.
In 2023, DBS Bank encountered five significant outages, with four attributed to bugs or software issues causing access problems for customers utilizing internet and mobile banking, electronic payment, and ATM services. Recent disruptions were identified as stemming from human error or software bugs within the bank's vendor systems.
In response, DBS Bank is actively planning to recruit additional engineering talent to address potential issues deeply embedded within its technology systems. Simultaneously, the bank is working on a comprehensive set of measures to enhance service availability. To support these efforts, a special budget of S$80 million has been allocated to fortify system resiliency, aiming for a more robust recovery process by the end of the first quarter of 2024.
Source : A timeline of DBS’ recent banking glitches, Banking & Finance - THE BUSINESS TIMES
Conclusion:
Within the banking industry, the dynamic nature of real-time testing for intricate software is indispensable yet arduous, as it must continuously adapt to evolving requirements that must meet customer demands. Despite considerable investment in fortifying security against external breaches, there tends to be a lack of emphasis on rigorously evaluating the integrity of the underlying code itself. Throughout 2023, software faults garnered widespread attention, consistently thrusting banking institutions into the spotlight. The impact on overall service disruption and brand perception remains to be fully understood; however, one thing that is clear is how these issues could have been avoided in the first place.
SES’s Software Escrow solutions play a vitally important role in ensuring key software used is rigorously tested and legally protected. For more information please contact our Banking Software Escrow specialist Atu Sikanda via email to [email protected]
