RELIABILITY and prudence are supposed to be the foundations of trust, the cornerstone of the banking industry, the attributes people look for when they decide to open a savings or a checking account.
Two similar incidents, involving the same number of banks, have shaken the cornerstone of the banking industry and compromised the reliability of automated teller machines (ATM). On June 5, 2017, ATM cardholders of the Bank of the Philippine Islands discovered unauthorized entries in their accounts doubling their debit or credit transactions. The problem, labeled as internal error or system glitch, compelled BPI to disable its ATM network and online banking service.
It would be an understatement to say that BPI clients were inconvenienced by the suspension of the bank’s electronic banking service, making them feel that the system was unreliable, glitchy and error-prone. With the ATM and online banking service disabled during that particular week to arrest and rectify the errors, non-banking transactions were also affected. Groceries and department stores were not able to process transactions of consumers paying for their purchases with BPI credit cards and electronic gift certificates. Cashiers told their customers that BPI terminals were not responding.
It was a nightmarish experience for the 166 year-old-bank, which prides itself as the first bank in the country and in Southeast Asia.
According to BPI, it has a network of more than 800 branches in the Philippines, Hong Kong and Europe, and nearly 3,000 ATMs and cash deposit machines.
The Senate is waiting for the central bank report on the BPI glitch before conducting a committee hearing on what really happened.
The public would have moved on from the banking nightmare if not for another shocking incident that took place on Friday—this time involving clients of BDO Unibank in a case of “potentially compromised ATMs” that posted unauthorized transactions.
The bank immediately issued a statement on the matter, which captured the essence of the problem. “BDO has obtained reports of potentially compromised ATMs, following reported losses from cardholders. Customers with unauthorized transactions may reach out to the bank via formal channels so that their cases may be properly investigated and, where confirmed as impacted, may be reimbursed,” said the bank’s corporate communications department, whose senior manager was supposedly roused from her vacation leave.
Many were taken aback, and the incoming central bank governor, Nestor Espenilla Jr., was at a loss for words when queried by reporters about the incident. “I will need to check it first,” was his initial response and, so far, that was it.
But Sen. Francis Escudero, who heads the Senate Committee on Banks, Financial Institutions and Currencies, was fuming and scheduled a hearing on the twin incidents for June 21.
The BPI nightmare was no longer an isolated incident, but a plague hounding two of the largest universal banks in the country. Who knows which bank will fall prey to a similar system glitch that will compromise ATMs and post unauthorized transactions against cardholders’ accounts?
The banking industry and its regulator, the Bangko Sentral ng Pilipinas, are duty-bound to fully restore the people’s trust and confidence in financial institutions in line with the country’s rosy economic outlook and the much vaunted inclusive growth that deserves a reliable and trustworthy banking system to safeguard the hard-earned money of merchants and consumers.
Failing to restore people’s trust in the banking system as soon as possible could lead depositors to entertain thoughts of keeping their money in the safety of their homes again. Banks are called upon to act quickly to assure the public of the reliability of their systems. They should lead us not into temptation of trusting the piggy bank again, but deliver us from the evils of skimming, ATM fraud and hacked accounts.