Hardware failure may cost TD Canada Trust customers, analyst says

Apologizing to their customers was just the first step.

Providing reassurance to TD Canada Trust customers about the stability of its electronic banking systems is the next, says an electronic banking analyst.

“To bring all of it down was fairly serious because they have disaster recovery sites that should pop into place immediately,” said Don Rolfe, managing director of Gomez Inc., a U.S.-based research company specializing in rating the online operations of financial-services companies.

TD Canada Trust customers who tried to access their accounts electronically on Saturday were inconvenienced for almost 12 hours. The bank’s Green Machine network, EasyWeb Internet banking and EasyLine telephone banking were affected. Service to TD Canada Trust customers through other automatic bank machine networks was also affected. The bank has said it is considering compensating customers on a case-by-case basis.

Full-page ads appeared in daily newspapers following the service interruption, apologizing for the incident, indicating “the hardware issue has been corrected.” The bank would not respond to questions posed by Computing Canada regarding details of the problem.

“If they’re saying it’s a hardware failure, that’s pretty bad that one point can knock your whole banking system down,” said Sandy Murdock of Peterborough Ont., a TD Customer who tried to access a number of cash machines Saturday.

Rolfe said many customers will be forgiving, but others, particularly those trying services for the first time, may not look the other way.

“They (customers) may make a conscious decision to say ‘Well, this doesn’t really work and I’m wasting my time here so that’s enough of that’ and they become dis-users.

“I give TD credit for having apologized for the situation and I think that goes an awful long way to rectifying it. I think certainly an apology and absorbing any losses or damages clients may have incurred as a result would certainly be appropriate. I think however they will lose some clients — not a lot – but some clients who simply feel that it was an absolute embarrassment to them. They will not justify it in their mind, no matter what.”

For many customers, the inability to access to their cash accounts was an inconvenience they don’t want to see repeated anytime soon.

Murdock, a database management specialist with J.A.J Computing, was on his way to a conference in Toronto and left Peterborough thinking he could stop for cash anywhere along the way. But after attempts at two different ATMs, he realized it probably wasn’t a problem with the terminals, but centrally at the bank.

“I was with a couple of fellas, we were going to a conference in Toronto and of course, I waited until that day to try and get money. While I was in Toronto everywhere I went I couldn’t get money. I ended up buying my lunch on a credit card . . . I was at Harveys and paid $7 on a credit card,” said Murdock.

Murdock said service levels have decreased since TD merged with Canada Trust in August. “At different times when I’ve been talking to the bank and complaining about different issues they’re telling us the system is overloaded because they had not anticipated the amount of traffic they were going to get,”

Rolfe says TD Canada Trust isn’t alone. Technical problems affected CIBC customers in the early 1990s when the system was down for more than a day and the Bank of Montreal experienced a problem three years ago when MasterCard service was interupted.

A former executive at CIBC, Rolfe said each client at that bank received a letter and was compensated.

“I can understand it’s a difficult situation for TD,” said Rofle, “but you fall on your sword — that’s what leadership is all about sometimes — you say yes, there was a problem and problems happen.”

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