Here’s why tech glitches haunt Indian bank customers

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The multitude of service providers and an inadequate IT support that trips under peak demand are taking a toll on the digital and mobile banking transactions. Customers continue to be at the receiving end even after the Reserve Bank of India (RBI) warned them and asked to beef up their IT systems.

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.

Is inadequate investment the prime reason? “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,” says a private banker.

A leading technology provider to Indian banks said on March 31 there were some hardware issues at HDFC Bank’s data centre, creating hiccups for customers. Following a serious service outage in December 2020, the bank has shifted its data centre from Reliance DAKC to a data centre hosted by Sify.

He, however, said 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.

Clearly, HDFC Bank uses a wide array of services provided by different tech platforms. For instance, it uses mobile banking applications provided by Backbace and net banking app by Flexcube (Oracle FSS). Its other services such as ATM, PoS, Interchange like credit cards/UPI and phone banking are run on Base24, owned by ACI Worldwide. For UPI transactions, HDFC Bank was using Mindgate interface. Now, the bank may be shifting to an ACI application.

The outage comes at a time 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 centre, the RBI had asked the bank’s board to identify lapses and fix accountability.

RBI had also barred the bank from issuing new credit cards. In February 2021, the regulator appointed an external technical auditor to evaluate the bank’s systems.

In December, 2020, RBI governor had said there is a need for banks and financial institutions to invest more in their IT systems. “We are constantly engaged with the managements of financial institutions where there is a need to improve their IT systems,” he had said.

On April 1, the e-banking services of SBI, the country’s largest lender, crashed as the bank’s digital banking platforms underwent an upgradation, forcing customers to vent their frustration on the social media. The bank’s various digital services were unavailable to most customers.

Of course, the bank had informed its customers of a 3.5-hour maintenance activity. The bank said it is upgrading its digital banking platforms, including Yono, Yono lite, internet banking, Unified Payments Interface (UPI). “We will be undertaking maintenance activities between 2:10pm to 5:40pm on April 1, 2021. During the period, INB/YONO/YONO Lite/UPI will be unavailable. We regret the inconvenience caused and request you to bear with us,” the bank said on Twitter.

Interestingly, the customers faced issues processing online transactions hours before its scheduled maintenance outage.

What irked the customers is the timing of the planned maintenance activity on April 1, the beginning of a new financial year when the transactions are generally high.

Other leading banks have also reported similar technical glitches, though smaller private banks have provided faster services.

Meanwhile, the Telecom Regulatory Authority of India (TRAI) released a week ago a 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. 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 header and templates with telecom operators. The SMSes 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.