[LINK] Human error triggered NAB software corruption

Bernard Robertson-Dunn 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
The Australian

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 



Bernard Robertson-Dunn
Canberra Australia
email:	 brd at iimetro.com.au
website: www.drbrd.com

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