Saturday, 30 June 2012

Having a giraffe!

If someone says something that seems a bit strange, unexpected, or a tad offensive, the standard response used to be: “Are you having a laugh?” – indicating that, from your point of view, what they’re saying is unreasonable. Well now, with a nod to Cockney rhyming slang, people say: “Are you having a giraffe?!”

Definitely not having a “giraffe” recently have been customers of British banks: Royal Bank of Scotland (RBS), Nat West, and Ulster Bank. These banks’ customers found that they couldn’t access their funds, or what they could see when they looked online at their account was not what they thought their balance should be!

The press have reported that people due to purchase new houses were unable to transfer money because they and their solicitors banked with Nat West. Another case in the papers referred to a prisoner who should have been released on bail, but the money never ‘appeared’ in the account so he spent the weekend in custody.

So, who’s to blame? It’s a bad time for banks – everywhere they’re being downgraded, but what went wrong for the RBS group of banks? RBS announced that the problems were all due to software failures. But I thought that seemed unlikely because the banks use good old reliable mainframes. However, as the week has gone on, it seems that it could be the result of a software failure, and the software in question was supplied by CA Technologies.

The story is that a technical problem occurred when RBS carried out a software update on Tuesday (19 June), which it fixed on Friday (22 June). The update or upgrade was being applied to RBS’s batch scheduling software, CA 7 Workload Automation. The software is used by RBS’s back end systems to update account balances.

This overnight upate is where the problem seems to have occurred. What isn’t clear is whether it was human error that led to technical issue, or whether there was some problem with the software itself.

There’s much buzz around that if the fault does lie with CA then RBS will take them to court for, what could turn out to be, a large sum in compensation. If it’s a result of what RBS’s staff did with the software, then that will be an internal matter.

One consequence of all this is that RBS has decided to cancel its corporate hospitality packages at Wimbledon. The bank said it would be “inappropriate” to continue providing the hospitality.

In addition to RBS carrying out its own internal investigation into what happened, Sir Mervyn King, the Governor of the Bank of England, has said that the Financial Services Authority (FSA) should investigate “what went wrong and then, perhaps even more importantly, why it took so long to recover”.

CA Technologies has announced that it is working with RBS to fix the technical issues that led to the outage of RBS’s online services for five days.

It’s bad news for customers, RBS, and CA, but there are lessons to be learned by every other bank,  insurance company, and other financial institution. Firstly, I believe it would be commercial suicide to ditch mainframes and migrate to other platforms – no matter how good they look during a PowerPoint presentation. More importantly, the lesson to learn is to ensure the resilience of the platform. If updates or upgrades are being made, then a complete back-up copy of a working system needs to be available elsewhere. Whatever happened to RBS’s hot back-up site? How come, when things went pear shaped, they couldn’t swap across to it and use their log files to update all transactions from the evening of the 19th? Every other bank needs to check its procedures for backing out failed software upgrades and running live on separate systems. And they need to be able to recover much faster than RBS’s five days!

With banks across Europe facing a pretty torrid time at the moment, and millions of online RBS customers unable to make payments or even see their balances last week, plus RBS facing compensation payment claims from its customers, and CA facing the possibility of litigation, on this occasion, no-one’s having a giraffe!

1 comment:

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