CBA missed ‘ glitch’ for four years
THE NATION’S biggest lender told the banking royal commission that its tech upgrades are “still not where we need to be” after a computer glitch that swept up more than 10,500 personal overdraft customers went undetected for four years.
The programming error meant some customers were given overdrafts they may not have been able to service as the automated system assumed they paid no rent at all and had very low living expenses.
Commonwealth Bank executive general manager of retail products Clive van Horen said the problem occurred with a coding error when overdraft processing functions were automated in July 2011. It went undetected until September 2015.
Commission chief Ken Hayne asked Mr van Horen whether “in hindsight” this is the sort of thing that “could have or should have” been detected before the automated tool was rolled out.
“Yes – I think the short answer is, yes. Could have. Should have,” Mr van Horen said.
But he said the bank made thousands of computer changes every month.
“Having robust change management processes to make sure that when we do a change it works as intended has been a massive area of focus for us for years as you might expect,” Mr van Horen said.
“We’ve made lots of improvement, we’re still not where we need to be.”
He said 9400 customers got personal overdrafts that should have been declined while 1100 received a higher overdraft limit than they should have had.
In 2016, the bank paid $ 180,000 in penalties and wrote off $ 2.5 million in personal loan overdraft balances.
This is the second scandal the bank has blamed on an errant computer upgrade. In August last year the antimoney- laundering watchdog accused the bank of breaching reporting rules on more than 53,000 potentially suspicious transactions on ATMs after a routine upgrade went wrong.
The commission heard that in 2016 the bank rejected as too costly plans for a $ 4 million “Big Data for Risk” project that was supposed to make it easier to determine customers’ ability to service debts.