Wells Fargo Recoups Following Massive Online, ATM Glitch

Wells Fargo said Tuesday it fixed a computer problem that left many of its Web banking customers unable to access their accounts over the weekend.

The problems were first discovered Sunday afternoon, and the San Francisco-based bank said all services had been restored as of early Tuesday, though some information, such as account balances, was expected to take longer to be fully brought up to date.

The bank emphasized the speed of the recovery of its online bankingservices, saying that by using backup facilities, Internet banking was restored in about an hour and forty minutes after problems were spotted Sunday.

Back Up and Running

The automated phone banking system and the bank’s own ATMs were back up and running in that time frame as well, thoughWells Fargo customers could not complete transactions at third-party ATMs until Tuesday.

The outage also impacted the bank’s back-end services, including processing of mortgage, home equity and student loans, as well as credit card transactions.

“Our customers hold us to a high standard of trust and reliability, and we want to assure them that all data about their accounts has remained safe and secure throughout this disruption,” said Avid Modjtabai, head of Wells Fargo’s technology and information group.

Crisis Response

The bank also apologized for the outage, and credited employees in its technology division with quickly responding to the crisis. It did not, however, offer any details on what went wrong.

Whatever the cause, the disruption is a major public relations blow for the country’s fifth-largest bank and a reminder of how many customers can be impacted when disruption hit the financial services systems, with everything from ATM users needing cash to merchants trying to accept debit-card payments touched by the brief outage.

Wells Fargo operates more than 6,000 bank branches nationwide and has about 23 million customers and has dealt with computer malfunctions in the past, including an incident about five years ago when users were frozen out of bank accounts for a brief period of time.

Not Alone

It’s not alone, as several major banks have had such hiccups along the way. In January, millions of Bank of America customers were unable to conduct transactions or check balances from inside their Web banking accounts due to what the company called a “hardware-related issue.” InJune, NatWest experienced a similar problem, with users unable to use ATMs or Web banking for several hours.

While Web banking has taken off in recent years, those still reluctant to use the Internet for banking are doing so largely because they are concerned about security, JupiterResearch analyst Ed Kountz told CRM Buyer.

Some people perceive online banking as being inherently less secure than offline transactions, and for those people, any type of outage or glitch is further proof that virtual banking is a risky business, he added.

“Incidents and outages can add to that perception for some consumers,” Kountz said. Still, most online banking customers are unlikely to switch banks or change behaviors due to an outage unless it was protracted in length.

Mostly High Marks

Wells Fargo was among the top three most reliable Internet banking sites — along with Citibank and National City — in a report by Web measurement firm Keynote last year. The bank also ranked high in the online customer support category.

Keynote did say, however, that Web banking sites can be susceptible to minor glitches, often related to the various applications that customers interact with, rather than the availability of or the speed of the Web site itself. In the past, and as recently as 2005, the bank has also won top marks for its online brokerage from another Web measurement firm, Gomez.

Consumers are savvy enough to know that issues arise occasionally and are more likely to judge a bank on how it reacts when problems do arise, said Kountz.

Still, because people are far more conservative when it comes to their financial dealings than with other aspects of their lives that they have readily moved online, Web banking is “still dealing with anxieties most other forms of Internet commerce left behind years ago,” eMarketer analyst David Hallerman told CRM Buyer.

While identity theft is a top concern, he added, a data loss that would keep consumers from their bank accounts or delay payments and cause them to fall into default follow close behind on the list of worries, fears fueled by occasional outages and downtimes.

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