German banks hit by recurring IT glitches

Source: Xinhua| 2019-07-03 19:19:52|Editor: Xiaoxia
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BERLIN, July 3 (Xinhua) -- Following the biggest IT breakdown in the history of the German credit bank (DKB), customers were finally able to access their bank accounts online again on Tuesday.

For almost 24 hours, DKB's customers were unable to access their accounts, perform online transfers or track receipts.

In an unusual move, the bank's Chief Executive Officer (CEO), Stefan Unterlandstaettner, posted a video on Youtube on Tuesday apologizing to DKB's roughly 4 million private customers that the bank had been "unable to keep our service promise 24/7 for the first time since DKB was founded."

"We have expanded server capacities in order to stabilize our website. I can assure you that your money is safe in your account at all times," he emphasized.

A DKB spokesperson stressed that the bank could rule out a hacker attack but that the cause of the failure was still being analyzed.

DKB was not the only bank in Germany experiencing IT failures in recent weeks. Commerzbank, Germany's second largest bank with 13 million private customers, has had three breakdowns in the past five weeks alone.

At the beginning of June, Commerzbank and its online subsidiary Comdirect were unable to process bank transfers, standing orders or direct debits for their customers.

On Friday, Commerzbank customers were unable to withdraw cash from ATMs or pay with their Girocards, and online banking was blocked as well. On Monday, online banking services were down again, but the problem was fixed within hours.

The breakdowns in recent weeks were not due to cyberattacks but to internal technical problems, according to a Commerzbank spokesperson.

In the event of major IT breakdowns, German banks are obliged to inform the German Federal Financial Supervisory Authority (BaFin) about the background and causes of disruptions.

"Not every IT malfunction leads to supervisory consequences," but if there are indications of systemic deficiencies, the financial supervisor will intervene, BaFin President Felix Hufeld said.

According to Hufeld, IT breakdowns often have comparatively banal reasons, such as operating errors by employees or problems with software updates.

German politicians from across the political spectrum have voiced criticism of the many IT failures that have happened.

"Many banks have an outdated IT infrastructure and have probably often invested too little," said Thomas Heilmann, member of the conservative CDU-CSU parliamentary group.

Fabio de Masi, deputy leader of the Left Party's parliamentary group, commented that "in a digital economy with competition from financial technology startups and private payment systems, IT breakdowns are like a power outage at lunchtime."

According to Oliver Geiseler, managing partner at the IT consultancy Capco, Germany's regional cooperative banks tended to experience significantly fewer IT breakdowns than private banks.

"Savings banks and Volksbanks (people's banks) are also under cost pressure, but not as much as private banks," he noted.

Even the German cooperative Volksbanks, however, have not been immune to IT problems.

Customers of both the PSD Bank Berlin-Brandenburg and the Berliner Volksbank reported on Tuesday that they could not log in to their bank accounts.

The Berliner Volksbank confirmed the disturbance on Twitter, saying that it was "sorry for the inconvenience."

A spokesperson for the National Association of German Cooperative Banks (BVR) confirmed that there had been "a disruption in online banking" but was unable to say how many institutions were affected nationwide.

Lisa Paus, spokesperson for the Green Party on financial policy, described the recurrent IT failures as a "warning signal."

"The current problems are symptomatic of the stagnating digitization in the banking sector" in Germany, cautioned the Green politician.