The Case(in brief) is :
RBC financial group, Canada's largest bank had a foul up in software which kept 10 million customers uncertain about their accounts. RBC bank was called Canada s largest bank in 1941 due to its total assests of $1billion and in october,2003 its total assests reached $413 billion spending $1.6 billion on technology.
The error prompted an internal review of the banks technology and processes. all this happened just when a single worker introduced a small number of fault pieces of code into banks transaction processing system,which began giving errors to the users.
Q1. what did RBC do incorrectly in the first place?that is, could RBC have foreseen the problem and put controls in place to prevent it?how?
solution: When any company for that matter makes use of an automated system for performing the critical operation[which in this case "key banking software"] is which involves either customer[CRM] or suppliers[SCM] or outside forces, it must test the output and performance before implementing[deploying in technical terms]. And moreover in this case it is The Bank where huge amount of money transactions are made and security is involved.The main strategy which a bank must implement is the customer loyalty and then comes proper investment in order to run the bank(which involves accounting studies). So concentrating on customer relation with bank, this error would surely result in great amount of indirect losses like customer dissatisfaction along with that millions of transaction error.
And all this happened due introduction of small pieces of incorrect codes in "key banking software" during updating by information technology staff. So it shows that human error in the program costs the bank a lot and while updating something you must not test on primary transaction processing system. They should have tested software properly and deployed.
The worst part was this error affected even the back-up recovery system,which doesn't make sense of having a back-up system because they had disabled it at that time. So this is one more mistake they did.
Q2.Did RBC handle the problem properly?why or why not?
solution: in my opinion the problem was not handled properly because of the fact that even tough they corrected teh coding error in one day but still many people were not able to acces to the information which caused a lot of trouble among customers. it affected the lives of few customers since they had to meet their personal expenses due to temporarily lost paychecks.
when the systems were being corrected the new transactions were getting piled up as they had decided to suspend the day to day transaction processing. it took one day to correct the error and hence now the bank had to do 2 days work to b done at once which proved difficult and upon that their decision of continuing few processing manually in order to keep away from software errors proved difficult.
And looking at customers relation at such a critical situation-- then bank's CEO, Gordan Nixon left to Europe during this time when he had to actually address the frustrated customers.
adding to it the bank's website was hacked. The customers got the mail in order to give their business card number and password for verification and when customers did so their accounts were hacked[hackers could access their accounts].
So the security system was also not maintained correctly. In short technological implementation was not done in the way it had to be for such a large Bank transaction system.
by
Amit Nayak T.E
1ms08is400
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