RBA fed up with banks’ glitches

Duncan Hughes

Banks will face tougher rules for reporting any outages and glitches with their electronic retail payments systems as a first step in guidelines being developed by the Reserve Bank of Australia.

It follows a series of high-profile breakdowns in National Australia Bank, Commonwealth Bank of Australia and Westpac Banking Corporation’s electronic retail payments systems during the past two years.

The RBA yesterday said it planned to “formalise” the reporting of major incidents to the retail payments system and “strengthening the handling of any future disruptions”, adding issues to be considered and likely recommendations were still be finalised.

In addition, the regulator would begin consultation with banks to identify where problems might emerge and how to swiftly deal with them.

The proposed review would include identifying “controls, safeguards and contingencies” dealing with problems and how they might be upgraded.

Recent incidents include NAB having difficulties with overnight processing of direct entry payments in November 2010.

The following March, CBA suffered glitches with point of sale and ATM services, which was following by problems at a Westpac data service that affected eftpos, internet banking and ATM services.

Jost Stollmann, chief executive of Tyro Payments, which provides eftpos merchant services, said: “The RBA’s patience with disruptions seems to run out and rightly so.”

RBA officials last year warned that despite high levels of investment, not all banks were moving at the same pace to modernise systems.

It has commissioned independent research to identify where there has been adequate levels of innovation in the Australian payments system to ensure adequate competition and value for customers.

Mr Stollman said banks needed to be exposed to greater competition from more modern payments services providers. “The reliability of the retail payment system is at stake,” he said.

The Australian Financial Review