Banking System Failure: Customers face glitches while using digital services!

A system outage appears when the bank is supposed to make a detailed report to the regulator on how they have fixed the glitches.

India has successfully flourished in the market of digitization leading to the growth of banking service providers and digital wallet platforms. However, customers remain on the receiving end due to the constant outages in the banks’ system. The ever-increasing number of service providers and inadequate IT support have sparked concerns amongst the customers.

The Reserve Bank of India (RBI) has issued several rundowns and warnings for the banks to beef up their IT systems, yet numerous issues prevail, leaving customers vexed.

Thousands of customers of top Indian banks, including the State Bank of India (SBI), HDFC Bank, and ICICI Bank, continued to face the brunt of the poor technology support offered by them, during the year-end and at the beginning of the fiscal year.

A money9 report quoted a private banker speaking about the Indian banks and revealed the issues faced due to the fragile system.

“Not really. The systems are not robust enough to handle high volumes. Peak volumes are affecting the performance, at least in some cases. In some other cases, it is pure bad luck,” a private banker said.

In December 2020, HDFC’s system reportedly suffered a serious service outage due to the shifting of its data center from Reliance DAKC to Sify. Meanwhile, on March 31, within a few months after a previous system failure, the bank yet again saw hardware issues, creating hiccups for customers.

However, the source quoted by money9 said that HDFC Bank ranks among the best in terms of investing in newer and robust technologies.

“It is just bad time for HDFC Bank that it had to face the technical glitches continuously, especially after the RBI appointed an external auditor to carry out a special audit of its IT infrastructure,” he added.

The report also mentioned that an outage appears when the bank is supposed to make a detailed report to the regulator on how they have fixed the glitches.

Following a prolonged outage of digital services in December 2020, after the electricity supply was snapped at the bank’s primary data center, the RBI had asked the bank’s board to identify lapses and fix accountability, reported money9.

The RBI also contained the bank’s actions of issuing new credit cards. In February 2021, the regulator appointed an external technical auditor to evaluate the bank’s systems. “We are constantly engaged with the management of financial institutions where there is a need to improve their IT systems,” the private banker said.

India’s yet another leading bank SBI, came under public scrutiny on April 1 as the bank’s digital banking platforms underwent an upgradation, forcing customers to vent their frustration on social media.

The customers reportedly faced issues processing online transactions hours before its scheduled maintenance outage. April 1 marked the onset of the new financial year, and SBI upgrading its systems irked the customers, when the transactions are generally high.

Interestingly, smaller private banks have provided faster services than the other leading banks that generally face technical glitches.

Telecom Regulatory Authority of India (TRAI) recently released the list of 40 `defaulter’ principal entities, including SBI, HDFC Bank, ICICI Bank, Punjab National Bank, Bank of India, Bank of Baroda, and Axis Bank that are not fulfilling the regulatory norms on bulk commercial messages despite repeated reminders, reported money9.

The norms set by TRAI for commercial messages, based on blockchain technology, aimed to curb unsolicited and fraudulent messages.

As per the norms, bonafide entities sending commercial text messages need to register message headers and templates with telecom operators. The SMS’ and OTPs, when sent by user entities such as banks and payment companies, are checked against the templates registered on the blockchain platform — a process called SMS scrubbing.

“It has been informed that Principal Entities including major banks are not transmitting mandatory parameters like content template IDs, and PE IDs, even in those cases where content templates have been registered, while sending such messages to telecom service providers for delivery,” TRAI said.

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