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Australia’s Commonwealth Bank hit by IT glitch

Julian Bajkowski | March 2, 2011
The Commonwealth Bank of Australia has defended its decision to pull internet and phone banking offline yesterday, saying the move was necessary to ensure the integrity of transactions.

Australia's largest retail banking institution has laid the blame for the latest service disruption on a database file problem that occurred during its end of month batch processing cycle.

The chief information officer for CBA's retail and business banking division, Adam Bennett, told The ­Australian Financial Review that although the move caused widespread inconvenience, the bank decided to take the safest option to preserve the integrity of customer accounts and transactions.

Retail banks are understood to have substantially tightened procedures for dealing with batch processing problems after National Australia Bank's systems disaster that was caused by a problem database file that went on to corrupt an overnight transaction run.

A key decision that banks are forced to make when database problems occur on mainframe systems is whether to cancel a processing run and start again or try to fix the problem midstream.

While customers are inconvenienced by the unavailability of internet services when delayed runs are undertaken in business hours, the delays buys institutions the peace of mind that a polluted stream of transactions will not land in accounts in the same way that hit the National Australia Bank.

At the same time, eftpos and automatic teller services are made available by bank systems defaulting to a so-called "floor limit", whereby customers can withdraw or purchase up to their maximum daily limit, with transactions reconciled later.

But because the floor limit effectively overrides actual account balances, accounts can become overdrawn.

Australian talkback radio coverage of CBA's disruption yesterday prompted some ambitious customers to rush to ATMs to make maximum withdrawals after it was claimed the machines were dispensing free money.

Banks typically pursue account holders for outstanding funds, and last night police cautioned customers against seeking to take advantage of the glitch.




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