Hundreds of thousands of workers had an agonising wait for their wages yesterday after an IT failure at HSBC left millions of pounds unpaid on one of the busiest pay days of the year.
An error in the processing system of Britain’s biggest bank meant that 275,000 payments, including salaries, failed before the bank holiday weekend.
The problems centred on transfers at HSBC’s business banking division, which handles payments for corporate customers. “I can’t even log in to HSBC to make my staff’s payments,” one small businessman tweeted.
Bacs, the operator of Britain’s payments system, said yesterday morning that it had suffered an “isolated issue that has affected one of its members”, but that otherwise money was being transferred normally. HSBC admitted that more than a quarter of a million payments had been affected, and apologised to its customers.
The glitch is understood to have begun when a worker at HSBC accidentally sent “dodgy code” to Bacs. This led to a series of problems as IT staff tried to correct the error.
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The bank began making the payments at 5pm, more than six hours after the problems started. HSBC said later that it had processed “99 per cent” of payments, with the remainder to be completed overnight.
Q&A
What happened?
It is unclear exactly how the problems began, but one source said that they were understood to have resulted from an initial error by an HSBC employee. It appears that a piece of incorrect computer code was sent to Bacs, the bank payment system, prompting a cascade of problems that led to transfers being stopped.
According to the bank, 275,000 payments from its corporate division were halted for several hours as IT staff attempted to fix the problems and restart the system.
What should I do?
Most employees affected are more than likely to have received their wages now, with HSBC saying that it would have cleared the backlog by this morning. The bank said that those who think they have still not received money due to them should contact their bank to check on the status of any payments. HSBC has promised that those left out of pocket or hit with charges as a result of the incident would be compensated and as with previous incidents, such as with RBS, any credit problems will be sorted out by the bank.
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Could it happen again?
Despite their best efforts, a glitch of this kind is more than likely to happen again, although industry efforts to improve systems, it is hoped, will ensure that future incidents are not as prolonged and that better procedures are in place to help those affected.
The process of upgrading the banking industry’s outdated systems could take more than a decade as lenders slowly replace older computers with state of the art machinery.
Is my money safe?
All British banks are protected by the Financial Services Compensation Scheme, which will compensate customers up to a maximum of £85,000 per institution. In this case, no money appears to have been at risk, meaning that any compensation will be paid by HSBC.
More broadly, there is no evidence that the incident led to problems at other banks. Indeed, HSBC retail customers appear to have been unaffected, with direct debit payments being processed as normal.