TD, CIBC glitches bring down key banking systems

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

At press time TD, which describes its difficulties

as a “”temporary service disruption,”” was still investigating problems that affected its ATM, EasyWeb, WebBroker and Interac systems, said Christa Poole, an external communications associate in Toronto. It lasted less than two hours last night.

“”So 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,'”” explained Poole. 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 through 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 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,”” said McLeod, adding he does not know the cause although the bank’s technical experts probably know the details by now. He said the affected transactions were made on the weekend and on Monday and affected less than one per cent of CIBC’s more than nine million retail banking customers. CIBC promised all account corrections will be made tonight.

“”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 of the technical mishap on its Web site and will round out its communication plan by mailing letters to customers. It will reverse charges prompted by NSF, or other, charges.

In an unrelated incident, an “”issue with a hard disk”” yesterday prevented customers for three hours from seeing their balances at CIBC’s President’s Choice Financial, run by CIBC’s subsidiary Amicus, he added.

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, Wing said, people understand these accidents occur, but they still become a little intolerant because of increasing dependence on technology.

“”In my view, the time that the public will start losing faith in the situation is when the financial institution doesn’t act properly and in a timely manner to . . . make the customers’ accounts whole and correct. 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 my networks”” that were actually adversely affected by it.


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