National Australia Bank (NAB) chief executive, Cameron Clyne, has sought to reassure shareholders that the bank is on top of the recent IT issues which saw millions of people stranded without cash for days.
Speaking at the bank’s annual general meeting, Clyne said the problem related to the NAB’s batch processing systems which gave rise to a number of delayed, duplicated and un-posted transactions.
According to the chief executive, the problem related to a combination of factors including a software ‘amendment’ carried out in 2001 to take account of the abolition of the Financial Institutions Duty (FID).
It also related to a coding error, which in conjunction with the 2001 update caused duplicate transactions. A scheduled maintenance patch from an external provider had also not been applied.
“This has been a difficult incident for many of our customers and the bank, but I am pleased with the way we have responded,” Clyne said.
The constraints of the bank’s linear batch processing were one of the reasons it had undertaken its NextGen Program, which seeks to deliver a new core banking platform.
The program, which commenced nearly two years ago, is geared at replacing 110 legacy systems and moving the bank toward real-time transaction processing.
The errors in NAB’s existing IT systems “absolutely validated” the decision to move to a new core banking platform, Clyne said.
“UBank’s USaver was the first product launched with the NextGen platform enabling customers to open an online account in five minutes, and we will soon introduce mortgage capability into UBank,” he said.
“By the end of 2012, NextGen will have developed the capability to support the majority of NAB products and customers.”
In late November, transaction management expert and Sydney University professor, Alan Fekete, criticised the bank argued that the impact to the customers need not have happened.
"They could have organised their systems so that even when something goes wrong they keep providing basic functionality,” Fekete told AAP.
"If Facebook is down for a few hours, people aren't nearly as inconvenienced but when banking is down it's a reasonably serious interruption."
On 30 November, almost 20,000 bank accounts still had uncorrected mistakes five days after a corrupted computer file crippled the bank’s payment system. Millions of people were stranded without cash for days.
The Commonwealth Bank also suffered a major issue with its NetBank service this week with its online banking portal being inaccessible to some users.
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