An internet banking outage threw the online operations of Westpac-owned St George Bank, Bank of Melbourne and BankSA into disarray over the weekend.

Hundreds of angry customers flooded social media on Sunday to complain about being unable to pay bills or make transactions. Upon attempting to log onto the internet services of St George Bank, customers were greeted with a message stating that the outage was down to an update to the bank’s computer systems over the weekend.

However, it has since been discovered that a when the systems went live again on early Sunday morning a major data corruption was found in the mainframe database, forcing Westpac to shut their services down for the majority of the day as they investigated.

The bank, after announcing that it was working on the problem, assured customers that they could still access ATM machines. However, customers soon began to complain that they couldn’t use these services, either.

The severity of the outage may cost the bank millions, as Westpac’s ageing CSC Hogan core banking system could have irrecoverably lost the transactional data of thousands of customers.

One commenter on the Australian Sunday Morning Herald site equated running Hogan for modern transactions to using ‘horses [to drive] your car’s engines’. Westpac has been working on the renovation of the core system, by wrapping a more up-to-date technology layer around it, also developed by CSC – Celeriti. The project has been in the making since 2010, with tangible results yet to be unveiled.

Rumours have circulated that the technical staff at St George Bank are unfamiliar with the Hogan system due to its age (there is a widespread concern in the market that Hogan specialists are nearing the retirement age with nobody to replace them). Also, a lack of commercial pressure to update the banking group systems has been cited by some as the root cause of St George Bank’s outage.

Westpac is not the only one to have experienced high-profile IT glitches recently. HSBC in the UK has suffered an embarrassing payday outage, whilst customers of another UK bank, NatWest, were locked out of online banking systems by IT malfunction. Sungard experienced an issue during the upgrade of its InvestOne platform at BNY Mellon that created a pricing collapse reportedly worth billions.

By Alex Hamilton

by IBS Intelligence