Government rounds on Bank of England following Chaps breakdown

The Bank of England is coming under intense political pressure to provide a more detailed explanation of the ten-hour breakdown in the operation of the UK's high value payments system, Chaps, on Monday.

  6 5 comments

Government rounds on Bank of England following Chaps breakdown

Editorial

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The Chaps system was eventually brought back online shortly after 4pm and the deadline for processing extended through to 8pm to clear the backlog of payments.

Throughout the day, as buyers and sellers of houses across Britain worried about whether their payments would be transferred, the Bank had remained relatively tight-lipped about the exact cause of the problems.

Although it has yet to give a clear explanation, it is understood that the glitch followed a weekend upgrade to change the name of a single bank name, from Northern Bank to Danske Bank, on the Chaps platform.

The breakdown in service is a huge embarrassment for the Bank of England, which has previously lambasted the nation's banks for the failings in their legacy IT infrastructure.

Andrew Tyrie MP, chairman of the Treasury Committee, has written to BofE governor Mark Carney, demanding a full explanation.

“A crucial part of the UK’s financial infrastructure failed for several hours today. I will be writing to the Bank of England to find out why," he says. “The whole economy depends on a reliable payment system. We need to have confidence that the cause has been found and addressed.”

For his part, Carney has launched an independent review of the causes of the unprecedented disruption. "The review will cover the causes of the incident, the effectiveness of the Bank’s response and the lessons learned for future contingency plans," says the Bank. "Its findings will be presented to Court which will then publish the full report and the response."

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Comments: (5)

A Finextra member 

Hey Finextra - it is correctly written as 'CHAPS' not 'Chaps'.

A Finextra member 

Current generation systems are notoriously inflexible and difficult to change - ask any product or IT manager in a transaction bank. It's already past the time to think about how banks and infrastructure providers approach payment systems, and look at more flexible, next-generation applications.

Nandu Kulkarni

Nandu Kulkarni Independent Consultant, Banking and Payments at Antarnaad Creative Software Solutions Pvt. Ltd.

It is truly surprising that changing the name of a single bank in the CHAPS system brought it crashing down. What is even more surprising is that it took them as long as it did to diagnose and fix the problem. As someone has rightly observed, what role did Mirs play (or not play) in the imbroglio?

Software Engineering, a 40 year old discipline, evidently has a long way to go before we are able to build systems that are less complex, more reliable, stable and easier to maintain!

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

I once heard the VP Engineering of a software product company say that putting bugs is a basic birthright of every software developer! While he said them only half seriously, his words reinforce @NanduK's point about software engineering still having a long way to go.

A Finextra member 

It's a fact of life that bugs and software go together that's why we need contingency plans in place.  What is most surprising about this story is that it took 10 hours to fix; so I suspect there's more to the story than a simple name change.

However, George is right, it's time to look at next generation and more open and competitive solutions which the PSR is taking an interest in.

Look forward to the report.

 

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