Boost for digital banking

THE BANKING IT Club yesterday issued guidelines to cope with the rapid growth of digital banking after digital highway congestion caused a major crash in the banking system last week.
The club, however, cautioned that it could not offer a 100 per cent guarantee that such an incident would not recur.
The club aims to increase the system’s capacity by 2-3 fold during peak hours and to create a framework that can deal with all incidents in order to ensure customer confidence amid continued growth in service usage.
The failure of Kasikornbank (KBank)’s core switch at 6.30am on August 31 forced ITMX, a local switching system service provider, to cut KBank’s system from the central system at 6.31 am, resulting in congestion of digital traffic in the systems of three other banks. 
Somkid Jiranuntarat, the chairman of Kasikorn Business Technology Group (KBTG) and chairman of the Banking Information Technology Club of the Thai Bankers Association, apologised to affected customers and promised to upgrade the service. 
The bank’s customers now prefer using financial services via electronic channels such as mobile phones, the Internet and ATMs of commercial banks, given the seamless connectivity between different banks, he said. 
The volume of service usage has increased rapidly and interruption in the service of any bank may affect the overall system, he said. 
KBank, however, accelerated the correction of its internal network system and all effects by 11am and resumed the service at 11.05am, he noted.
His explanation, however, was at odds with the Bank of Thailand’s statement on August 31 that high volume of transactions had caused the crash.
At an event on September 1, Somkid insisted that no errors were seen in KBank’s system as it operated normally. “However, there was a large volume of funds transfer transactions with incorrect account numbers from other banks as some people put their phone numbers instead of their bank account numbers to execute their transactions,” he explained.
Detecting unusual activity, ITMX decided to cut KBank’s system from the central system at 10.15am. KBank then switched to a backup system, Processing Centre Company (PCC), immediately, thus allowing its customers to conduct funds transfer transactions to all banks as normal. Some customers who were still linked with PCC at that time could even transfer funds to KBank accounts.
However, the customers of several other banks could not transfer money to KBank accounts via ITMX. KBank then collaborated with ITMX to confirm to the general public that KBank’s system could function normally at 4.11pm without any effect on the systems of other banks. ITMX then reconnected the system to allow other banks to resume funds transfer transactions to KBank accounts.
“Other banks have also committed to upgrade their IT system. For example, it must instruct customers exactly what they must do and not just convey a ‘system error’ message after they make some mistakes during their transactions,” he added.
In order to ensure service continuity, the club and the National ITMX (Interbank Transaction Management and Exchange) Co, Ltd, which is responsible for supervising interbank connectivity, have come up with six guidelines to enhance digital services.
The guidelines aim to increase the system strength, unlock bottlenecks and revise the architectural design so that the mobile system can accommodate a volume of service at least two fold the number of peak transactions.
It would add control measures for more efficient change management of each bank.
The ITMX would fortify the existing system’s capability by at least two fold to support the rapid increase in interbank transactions after fee waiver for funds transfer across banks was implemented. They would establish a joint working group between commercial banks and ITMX to determine the conditions and clearly defined guidelines to temporarily eliminate a bank that encounters a system failure from the central system so as to prevent the problem from escalating and affecting the ITMX network and other banks. 
It would also allow immediate connection as soon as the system is restored and returns to normalcy.
They would build up capabilities for monitoring the overall system through the development of a central dashboard in order to update the status of each bank’s system and inform member banks to ensure timeliness in preparation and problem solving. 
They would review the design of the mobile banking system and display of transaction status message, which must be clear and easy to understand to avoid confusion.
The Thai banking system has developed a lot and become more complex, Somkid said. He added that though the possibility of recurring problems does exist, it has been much diminished thanks to implementation of stricter measures. Any technical difficulties have become more easily manageable enabling the operation to return to normalcy soon.
“We cannot offer a 100 per cent guarantee, but we will handle the system extremely carefully,” Somkid said yesterday at a press conference in response to a question on whether the incident could happen again.