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IBS Journal October 2015


HSBC suffers IT glitch leaving more than 275,000 without payments


Hundreds of thousands of HSBC customers have been left without their monthly pay as the multinational bank suffered an IT glitch affecting its commercial and corporate banking platforms. The outage is believed to have been


caused by a flaw in some information sent to Bacs, the system used to process the mil- lions of debit and credit transactions in the UK. HSBC is understood to have contacted the Bank of England and the Financial Con- duct Authority over the problem. The prob- lem is believed to also be affecting cus- tomers of other banks sending or receiving payments to or from HSBC accounts.


Errors, anger and ruined holiday plans ‘There has been a fault in the information


used to process some payments from HSBC business customers,’ the bank said in a statement. ‘Approximately 275,000 payments have been affected, including payments to customers of other banks.’ Customers of the bank have been


affected on both sides, with companies being unable to pay their staff, take and pay loans and authorise other transactions. At the time of writing both HSBC’s retail and commercial banking systems display errors. The glitch has arrived at a highly inoppor- tune time as millions of people were preparing for a bank holiday in the UK. Thousands of dis- gruntled customers took to Twitter and social media to vent their anger at the bank, which is updating them via its own support channels. The problem was eventually rectified.


The bank has recently reported a ten per


cent increase in profits for 2015 in the wake of a major restructure of its digital business model. Investment in end-to-end digitisa- tion, the use of ever-popular cloud comput- ing and a reworking of the bank’s main- frames were lauded as major pathways HSBC could take towards greater profitability. The restructure was bad news for


workers at the bank, however, as it axed 25,000 jobs to support its new digitisation. The bank is also in the process of shedding the Pakistani operations by selling them to Meezan Bank, Pakistan’s largest bank. It already jettisoned its Brazilian assets to South American financial group Banco Bradesco in a deal worth £3.36 billion. Alex Hamilton


Payments innovations: cabs, wristbands and contactless jackets


The payments industry is a fast-moving one. Sometimes it’s tough to keep track of every new innovation, revelation and occasional oddball invention. We’ve looked at the names big and


small – from international cab company Uber to Scottish knitwear manufacturers Lyle & Scott – and news from around the globe. First up, news from India is that cab


service Uber is planning to create its own mobile payment wallet in the country. The US-based company already allows payments through a Paytm wallet and recently tapped up Airtel Money to enable payments through that firm’s wallet system as well. At present, according to the Reserve


Bank of India, the country’s central bank and regulator, marketplaces are not allowed to provide closed wallets on their platforms. Uber may circumnavigate this barrier, however, by creating a semi-closed wallet that can provide digital payments to several merchants. The strategy ties into the cab company’s strategy of turning India


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into its second largest market after the US – it has also spread its influence to 22 cities in the country. Being digital has its drawbacks, though, and Uber appears to have recog- nised this in India by piloting its first cash payment system there. Indians are more comfortable paying cash, according to Uber, and enabling those types of pay- ments would help enhance the company’s growth in the region. Cash payments are now available in 21 of the 22 Indian cities that Uber operates in, with Mumbai being the only exception. Commuters in Singapore are testing


out a new contactless payments method linked to an NFC-enabled wristband. The trial, involving 200 customers using specially-equipped Sony Smartbands, has been given the go ahead by the country’s Land Transport Authority in partnership with mobile operator Singtel, Sony and various terminal providers. As well as pay- ing for their travel and commute with the


© IBS Intelligence 2015 www.ibsintelligence.com


wristbands, trialists will be able to use them at certain retailers and restaurants. Just when you thought contactless


payments couldn’t get any more intuitive, Scottish knitwear brand Lyle & Scott has come up with a creative method for your daily commute – a contactless jacket. Made in partnership with Barclays, the jacket has a contactless payments chip and antenna embedded into its sleeve, meaning wear- ers can make payments by simply brushing their hands against compatible terminals. Shoppers who love their contactless


cards will be buoyed by the news that the limit for a single payment in the UK has been raised from £20 to £30. According to trade body The UK Cards Association, more contactless payments occurred in the first six months of 2014 than the pre- vious six years combined. With 58 million contactless cards in the UK, the increase in payment limit will only see those figures increase.


Alex Hamilton


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