IBS Journal November 2015


Ageing CSC Hogan core system behind Westpac weekend banking outage


An internet banking outage threw the online operations of Westpac-owned St George Bank, Bank of Melbourne and BankSA into disarray. Hundreds of angry customers flood- ed social media to complain about being unable to pay bills or make transactions. Upon attempting to log onto the inter- net 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 week- end.


However, it has since been discovered


that a when the systems went live again 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 cus- tomers 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 Sun-


day Morning Herald site equated running Hogan for modern transactions to using ‘horses [to drive] your car’s engines’. West-


JCB and Fujitsu: wave and pay


Japanese credit card company JCB is set to trial palm vein authentication technology, allowing users to make purchases with a wave of their hand. The system, powered by technology


from Fujitsu, was first trialled by JCB employ- ees at the company’s headquarters in Tokyo as a way to pay for their food in the cafete- ria. When making a payment, users need to simply wave their hand over a palm vein sensor. The biometric data, which is paired with payment card information, is then used to authenticate the transaction.


Palm vein data from JCB customers,


as well as their card information, has been registered in advance in Fujitsu databases. According to Fujitsu, its palm vein technol- ogy has been used by more than 63 million people worldwide.


JCB is planning pilots in different glob-


al markets in the future, according to Tac Watanabe, executive vice-president of brand infrastructure at JCB. The new pay- ment strategy, he adds, will be in deployed in line with the needs of JCB customers. The system’s fluidity does depend on


the number of registered customers, JCB has admitted. If the scheme is hugely success- ful, it says, the authentication process might need to be streamlined through the use of a multi-digit passcode in addition to the palm vein recognition. JCB concluded a deal with Bank Rak-


yat Indonesia (BRI) in August, designed to allow the use of JCB cards across Indonesia. The firm’s cards will be usable with BRI’s ATM network, which numbers more than 21,000 machines.


Alex Hamilton Card payments to overtake cash in UK in 2016


2016 will be the year that consumer card payments finally overtake cash in the UK, while by 2024 the country will be making 44 billion payments a year. This is according to research conducted


by Payments UK, the trade association for the country’s payments industry. Its findings show that yearly payments will increase by 3.4 billion in ten years – roughly 120 million payments a day. The Faster Payments system, which has already processed four billion payments


20


since its inception in 2008, is predicted to be processing 1.94 billion a year by 2024. Direct debit usage, driven by the rise in


contactless payments, will continue to see steady growth, according to Payments UK.


Cash crash This comes at the expense of cash payments, which will finally be eclipsed by the end of next year. Cash is also set to decline by as much as 30%, from 18.1 billion payments in 2014 to just 12.6 billion in 2024.


© IBS Intelligence 2015 www.ibsintelligence.com Cards will account for 60% of non-cash


payments by 2024, up from 51% in 2014. Despite this, cash machines will remain the main source through which consumers will withdraw their funds, with 25 billion with- drawals a year predicted by 2024. Cheque payments, which were debat-


ed at this year’s Sibos conference in Singa- pore (see p30), will drop even further into obscurity – from 2.8% usage in 2014 to just 0.8% by 2024.


Alex Hamilton


pac 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 tech-


nical staff at St George Bank are unfamil- iar with the Hogan system due to its age (there is a widespread concern in the mar- ket 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.


Alex Hamilton


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