Computer glitches paralyse CIBC, TD banking systems

The Canadian Imperial Bank of Commerce and TD Canada Trust reported system problems affecting thousands of customers in late July, one month following a technology-related banking crisis at RBC.

At press time TD described its difficulties as a “”temporary service disruption”” and was still

investigating problems that affected its ABM, EasyWeb, WebBroker and Interac systems, said Christa Poole, an external communications associate in Toronto. It lasted less than two hours.

“”From my understanding, what it was is, if you were using an ABM machine, you’d put your card in and it would either say ‘error’ or ‘temporarily unavailable,’”” Poole said. Nor could customers check online accounts. “”The whole time our money was always safe and secure.””

Earlier this month, TD announced a $450-million deal in which HP will upgrade its ABM network and debit terminals across Canada.

At the same time, CIBC made a “”technical change”” to its system over the weekend in late July and, during a processing of transactions involving its personal line of credit accounts, the system stopped because it noticed a program error, said Rob McLeod, Toronto-based communications director of the bank.

“”So we reversed the technical change we had made and re-processed the transactions,”” McLeod said. He did not know the cause, but that the bank’s technical experts probably knew the details at that time. He said the affected transactions were made on that July weekend and on the following Monday, and affected less than one per cent of CIBC’s more than nine million retail banking customers. CIBC promised all account corrections would be done immediately.

“”Prior to the stopping of the earlier process, a number of transactions had already been actually processed. So what happened was the changes had been made twice. This involved about 60,000 personal line of credit customers.””

CIBC posted an explanation on its Web site and will round out its communication plan by mailing letters to customers. It will reverse charges prompted by non-sufficient funds or other charges.

In another incident at the end of July, an “”issue with a hard disk”” prevented customers from seeing their balances for three hours at President’s Choice Financial, run by CIBC’s subsidiary Amicus.

Despite RBC’s fiasco last month, an expert doubted recent technical troubles experienced by CIBC and TD would provoke a lasting negative reaction in customers.

Paul Wing, a Toronto-based independent analyst with 21 years’ security and audit experience in the banking sector, said most of the time the system works for people although banks deal with huge volumes of transactions. For the most part, he said, people understand these accidents occur, but they still become a little intolerant because of increasing dependence on technology.

“”In my view, the public will start losing faith in the situation when the financial institution doesn’t act properly and in a timely manner to. . . make the customers’ accounts whole and correct,”” said Wing. “”That was part of the challenge with the Royal Bank situation and it dragged on too long.””

In the instance of RBC, some client transactions such as deposits, withdrawals and payments made from May 31 through June 2 weren’t reflected in client balances because of a software programming change gone awry. It took several days to show correct balances for all affected customers.

The bank later hired IBM to conduct an independent review of the lapse.

Of all the research work Wing did on RBC’s blunder, however, he was hard-pressed to find “”people in (his) networks”” that were actually adversely affected by it.

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