CBA’s IT collapse latest in a long line of failures
Today’s Commonwealth Bank online outage is the third major CBA failure since June and the eighth time in the past eight months that Australian big banks’ IT systems have crashed, leaving millions of customers and businesses stranded without cash, an analysis by Tyro Payments has found.
Tyro Payments CEO Jost Stollmann said Australia’s banking system needed to adopt world’s best practice and invest in state of the art systems required for the 21st century.
What is at stake is the reliability of the retail payment system with $500 billion spent annually.
“Electronic payments are the arteries of a modern economy,” Mr Stollmann said.
“But the banks have ageing and archaic IT systems that are expensive to maintain and prone to collapse.
“For too long, banks have starved the payment infrastructure of innovation and investment.
“Australia’s banking IT systems have the reliability of a 1970s Leyland PT76, when customers deserve a 21st century BMW.”
CBA’s problems are not new.
Former CBA chief information officer Michael Harte told a Sydney conference in 2012 that of the $1.2 billion spent by the bank on technology each year, $650 million was invested in “keeping the systems alive”.
The outages affect a range of services including ATMs, online banking and credit card and debit card transactions.
Despite Australia moving towards a ‘cashless society’, Mr Harte has previously admitted it was “really expensive” and “really hard” to deliver reliable online banking systems.
However, Tyro, Australia’s business-only bank and EFTPOS provider, has delivered 99.996 per cent system availability, the shortfall from 100 per cent being issuer banks unavailable, and that with a $30 million investment in its cutting edge technology, multiple switches and data centres.
In case of a maintenance interval or component failure the Tyro terminal simply seeks the next available switch in seconds. The customer is not impacted.
Frustration with unreliable banking systems appears to be strengthening, with the regulators signalling a harder line on banks, which recently announced record profits.
The Reserve Bank of Australia has previously said it and the Australian Prudential Regulation Authority would consider ‘strengthening the handling of any future bank disruptions’.
The systems outages come as the major banks announce more staff cuts while simultaneously raising investment mortgage rates independent of the Reserve Bank’s cash rate.
“It is not rocket science. Retailers worried about disruptions or delays caused by their incumbent EFTPOS provider now have a reliable alternative. Banks have to perform or lose the business,” Mr Stollmann says.
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