Royal Bank of Canada extended its banking hours Friday and will open some normally closed branches throughout Canada Saturday as it struggles to resolve computer foul-ups that have turned into a five-day banking fiasco.
As of Friday afternoon, Canada's biggest bank was still unable to tell all of its 10 million clients how much money they have in their account. RBC said Friday the extended hours were to help those “who may be experiencing difficulties” as a result of the disruption and that all accounts should be updated by the weekend.
Nor was it clear whether transactions taking place Friday were showing up on customer's accounts.
“It is a very good question and one that I do not have an answer to,” said Judi Levita, a Royal Bank media-relations officer.
Jim Carroll, a futurist trends and innovation expert, said the reliability of computer systems is going to emerge as the next large corporate governance issue.
“We are going to see an increasing number of situations like this where tremendous damage is done to a business because of some small technology issue. We are going to see significant monetary loss, and we are going to find screams for this to be a board-level issue.”
RBC's computer woes began Monday, May 31 with what it described as a routine programming update to one of its computer systems. The bank's national system failed to register withdrawals, deposits and payments against customer balances.
Ms. Levita said Friday that transactions made Monday May 31, Tuesday June 1 and Wednesday June 2 should now be reflected in client balances. Transactions made Thursday June 3 and Friday will not be reflected until this weekend.
“We are in the process of going through all of them,” she said, adding that the bank has been manually restoring data one day at a time.
The delay has hit thousands of government employees whose paycheques are processed by RBC for both its own customers and for deposit in accounts at other financial institutions.
Most of the Ontario government's 62,000 employees were experiencing a payroll delay Friday, as were provincial public servants in New Brunswick, and City of Toronto workers, Canadian Press reported.
Tom Broen, an Ontario government worker in Toronto, said his Thursday paycheque has yet to appear. “It is still not in my account today, and I am actually overdrawn as a result.”
RBC should have resolved the problem more quickly, he said. “I will be ticked off if it doesn't go through in 24 hours. I live on a paycheque-to-paycheque basis, so this is quite frustrating.”
RBC's Ms. Levita said the bank has received calls from other customers, but insisted that “things are moving quickly.” The bank had originally said it hoped to have the issue resolved late Tuesday.
Bank officials have said customers can still get at their accounts through branches or bank machines and can withdraw money that was there before the trouble hit, plus varying sums based on individual limits attached to their client cards.
Ms. Levita said RBC does not expect the processing delays will trigger service fees or overdraft interest charges due to late mortgage or bill payments. RBC has been in touch with other banks, she said. However, “if somehow they materialize, clients will be refunded.”
The bank's investment accounts have not been affected, she said. “Everyone's money is safe and secure. Payments are there, but they are not reflected in the accounts.”
According to Ms. Levita, the original programming error led to a processing delay that requires hands-on intervention to complete huge numbers of transactions that would normally be processed automatically.
Each RBC transaction is given a unique sequencing number in the order that the information's received, she explained. Because the bank focused its efforts on fixing the programming error, that created a one-day delay in running the transaction-processing data. The bank has been manually verifying the data at key points, which is what is slowing the processing time, she said.
Mr. Carroll said that businesses are increasingly dependent on sophisticated systems of technology, networks and infrastructure that most people in a large company don't understand.
“The business systems that we are building are becoming more and more complex. There are more pieces that talk to other pieces and if any of them go wrong, it has a cascading effect” he said. “What are we doing to ensure that the critical stuff upon which our business functions is of the utmost reliability?”
Mr. Carroll said it sounds like RBC was doing a update of some sort when things went wrong. “And when that happens, it can take a lot of time to bring systems back on-line, especially if you have not undergone a lot of disaster planning.”
The banking problems had little effect on RBC's stock, which edged up 5 cents Friday afternoon to $59.20.
The bank said it will post on its website by Friday evening a list of the branches that will open Saturday.
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