A systemic meltdown has shaken the financial world this week as dozens of banks started to suffer repeated outages all around the globe. Just this week, banks’ system was down in seven countries across five continents, leaving tens of millions of customers extremely frustrated. In the US, thousands of customers reported outages in the Bank of America app on October 1st, right when rent, utilities, and other bills are often due. Many of them revealed that even after the system was allegedly restored, some operations weren’t working, which left them late on several bills and forced them to pay credit card interest.
But despite the major inconvenience, things could be a lot worse. For instance, in New Zealand, now in its seventh week of nationwide lockdown, millions were left without access to their money as banking services were down at a time all local branches were closed. One of the country’s largest lenders, Kiwibank, faced a major outage on Tuesday after a DDoS attack on New Zealand’s third-largest Internet provider resulted in IT crashes at a number of lenders, including Commonwealth Bank and Anz Bank.
Of course, New Zealand and the US aren’t the only countries facing massive outages within their banking systems in recent weeks. In banks across the UK, South Africa, Venezuela, Japan, and Mexico operating failures were also reported recently. At least 24 million account holders of Mexico’s largest bank, BBVA Mexico, were left unable to use the bank’s ATMs, its mobile app, or make in-store payments for over 20 hours starting in the morning of September 12. Strangely enough, less than a week after the BBVA outage, Santander Mexico also faced an operational crash that left customers across the country unable to use their debit cards at the ATM or in stores. One more time, it was said the problem was related to internal failures.
Some financial analysts argue that the outages are linked to a cyber attack planned by highly professional illegal organizations. Cyber theft has become common in the country due to the lack of enforcement of existing laws and the absence of adequate legal tools to hold attackers accountable for their actions. Meanwhile, in the UK, where the Financial Conduct Authority said to be “deeply concerned” about the increasing number of technology outages over the years, the regulator’s executive director of supervision, Megan Butler, revealed that the number of “incidents of operation resilience breaks” reported in 2021 have surged by 300 percent year-on-year. Butler argued that this is a “growing trend,” and the number of reported IT failings continues to increase.
Late in July, the websites of six big banks — Lloyds, HSBC, TESCO Bank, Bank of Scotland, Halifax, and Barclays — collapsed allegedly due to a global Internet outage caused by a software update failure at hosting service Akamai. One month later, the apps of five of the six banks went down for days. Several customers faced acute financial losses and consequently saw their credit ratings deteriorate. Millions were unable to make mortgage payments and have fallen behind on their bills. More than 1,300 clients became victims of identity theft.
In Venezuela, 16 million customers of the country’s biggest bank, Banco de Venezuela, recently suffered a five-day outage as the bank’s online platform crashed. At the same time, in Japan, Mizuho Bank, one of Japan’s three megabanks, suffered from its eighth consecutive IT system failure on September 30 – recording almost one disruption every month. During the latest incident, a system error triggered a major delay in foreign exchange transactions.
“Another bank that has been plagued by repeated IT system problems is South Africa’s largest lender, Standard Bank. In late April, the bank suffered “hardware issues” that downed its internet, mobile, and ATM channels for over a week, leaving customers unable to pay their bills or access cash,” the writer reported. “If you are a large retail bank, you are probably dealing with legacy systems”, the deputy chief executive of the Prudential Regulation Authority, Lyndon Nelson, said during the investigation. Nelson mentioned that when fintech companies add new features to their apps, big banks usually do the same even if they don’t have enough tech support to do it right. They need to launch similar services “for competitive reasons,” he argued.
The truth is that banking app failures or a sudden crash on IT systems are a recipe for chaos. If things get turbulent when outages crash IT services for a couple of days, just imagine what would happen when these disruptions last for weeks on end. Now more than ever, it’s essential to secure your assets in a safe place, because whether it’s a power shortage, a bank outage, a cyberattack, or a stock market crash, your assets can be wiped out in a snap of fingers.
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