[LINK] Human error triggered NAB software corruption
brd at iimetro.com.au
Tue Nov 30 09:17:10 AEDT 2010
This is getting more believable.
It would seem to be a problem with change control of their batch processing.
Human error triggered NAB software corruption
A NATIONAL Australia Bank staffer with access to several mainframe
systems caused one of Australian banking's biggest bungles.
NAB refuses to give a detailed technical explanation as to what went
wrong and denies claims its mainframe system had anything to do with the
The bank's technology issues last week affected not only other major and
regional banks, and their customers; retailers, such as Woolworths, were
also caught in the dragnet. Some people realised they could not pay the
rent or buy groceries with no salary to draw on. The affected banks have
been forced to roster additional customer service agents to handle
queries that have been flooding in since the problem struck on Thursday.
The banks had to offer customers temporary overdrafts without charging
interest or fees, change payment dates for loan repayments and forfeit
penalty fees on overdue mortgage payments or overdrawn accounts.
NAB conducts batch processing on behalf of other banks each day. When
completed, a file, containing a detailed transaction history, is
generated, which is then sent to the banks by NAB at the end of the day.
On early Thursday morning, IT departments at financial institutions such
as Commonwealth Bank, Westpac, ANZ, HSBC, Citibank and Bank of
Queensland went on high alert when they did not receive the files.
NAB told them that "technical issues" had hampered the delivery of the
files. The widespread ramifications were immediately clear to all
stakeholders: the inability to reconcile accounts would be a disaster.
Since the news broke, NAB has blamed a "corrupted file in the processing
batch" as the cause of its nightmares.
However, it apparently was not a "file" itself that was the problem.
Instead, it appears that someone from NAB's IT department who had access
to the system inadvertently uploaded a file that "corrupted" the system.
NAB spokesman George Wright described this as a "fair" statement as he
tried to explain exactly what went wrong.
Mr Wright said he did not have technical details of what happened, but
ruled out sabotage, hacking or a virus attack. He confirmed the
corrupted file itself did not contain any customer data. The "file" was
actually software code containing instructions on how systems should
operate in the batch processing cycle.
The issue had nothing to do with NAB's mainframes which, he stressed,
did not crash.
He rejected claims a botched mainframe upgrade was the culprit and
declined to comment on reports that a recommendation to spend $100
million on back-up IT measures was rejected in 2008.
"We spent $900m on IT infrastructure last year alone," he said.
Mr Wright said the problem also had nothing to do with NAB's $1 billion
core banking platform upgrade, dubbed NextGen.
He said the problems, such as duplicate or missing transactions, had
been resolved for most customers.
NAB has vowed to compensate people left out of pocket. The bank had
identified about 19,155 accounts, which had outstanding problems of
duplicate or multiple transactions. But NAB's banking clients, including
St George and Bank of Queensland, have had to hire extra staff to deal
with problems at their end. They have also promised to waive any late fees.
A Bank of Queensland spokeswoman said the issue of compensation had not
been broached. A Woolworths spokeswoman confirmed there was a delay in
receiving payment from NAB for "some credit transactions but this has
now been resolved".
NAB said delayed value exchanges to other banks had been processed over
the weekend. "This means other banks can now begin to process any salary
or other payments to their customers which may have been impacted by the
processing delay," it said yesterday.
The NAB glitch forced its chief Cameron Clyne to apologise in newspaper
advertisements yesterday, with NAB branches forced to stay open over the
email: brd at iimetro.com.au
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