Megan Brooks
A global IT outage caused by a software issue at CrowdStrike, a cybersecurity company, impacted a variety of industries and services, including banks and financial institutions. While some major American banking systems remained largely unaffected, several banks experienced disruptions, with customers unable to access online banking, make payments, or use mobile banking and ATM services. This incident highlights the vulnerability of banks and payment systems to mass outages and the need for robust contingency measures.
| Characteristics | Values |
|---|---|
| Date of Outage | 19 July 2024 |
| Cause of Outage | A "defect found in a single content update for Windows hosts" from CrowdStrike |
| Companies Impacted | Microsoft, banks, airlines, hospitals, broadcasters, fire authorities, health care providers, etc. |
| Banks Impacted | TD Bank, Bank of America, US Bank, Wells Fargo, Citizens Bank, etc. |
| Impact on Banks | Interruption in online banking, mobile check deposits, funds transfers, etc. |
| Customer Impact | Customers unable to access their online banking and make payments |
| Resolution Status | A fix was quickly made available, but some devices still experienced issues |
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What You'll Learn
Banks affected by the CrowdStrike outage
On July 19, 2024, a global IT outage caused by a software update from CrowdStrike, a cybersecurity company, affected banks and financial institutions worldwide. The update was intended to protect customers from hackers, but a defect in the update caused issues for Windows operating systems. This resulted in disruptions to banks' operations and their customers' ability to access their accounts and carry out transactions.
The CrowdStrike outage impacted banks in several countries, including New Zealand, South Africa, Australia, India, and Germany. In New Zealand, ASB and Kiwibank were among the affected financial institutions. The National Emergency Management Agency of New Zealand warned of the outage's impact on businesses and banks in the country.
The disruption to banks and financial institutions highlighted the vulnerability of their systems to mass outages and the potential for massive disruption when a small number of cybersecurity companies supply and update millions of corporate PCs. This incident also raised questions about the stability and security of the digital economy and the need for banks to ensure the robustness of their operations in the future.
While the exact number of banks affected by the CrowdStrike outage is unknown, it caused widespread disruption to financial institutions and their customers globally. Banks and card payment systems were among the victims of the technology outage, with many customers unable to access their online banking services. This incident underscores the importance of thoroughly testing and gradually rolling out updates to avoid similar outages in the future.
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Impact on online banking and mobile banking
The CrowdStrike outage, caused by a "defect found in a single content update for Windows hosts", impacted a variety of industries and services globally, including banking and financial services. Many banks and financial apps were affected by the outage, with customers reporting issues with online banking and mobile banking services.
Users reported issues with services at multiple banks, including Bank of America, US Bank, and Wells Fargo. Some of the most common problems included online banking, mobile check deposits, funds transfers, and mobile login. For example, users reported not being able to access their online banking services, with many customers being unable to log in to their accounts.
Several banks acknowledged the impact of the outage and assured customers that they were working to resolve the issues. TD Bank, for instance, confirmed that the majority of their impacted systems, including online banking, had been restored. Citizens Bank also stated that it was experiencing very limited impacts and that its tech teams were fully engaged in monitoring the system and resolving any issues.
While some banks reported disruptions, major financial services in the US remained operational. Visa, for instance, reported no disruptions to its payment processing systems, although it was aware of reports of people being unable to make payments. Similarly, KeyBank, Interactive Brokers, and Ally Financial confirmed that their systems were operating normally.
The CrowdStrike outage highlighted the vulnerability of banks and payment systems to mass outages. It underscored the need for banks and payment companies to ensure their operations are robust and resilient in the event of future cyber incidents or technical failures.
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Payment systems affected
The CrowdStrike outage, caused by a defect in a Windows content update, impacted a variety of industries and services around the world. This included banks and financial institutions, with users reporting issues with online banking, mobile check deposits, funds transfers, and mobile banking.
While Visa stated that its systems were operating normally, it acknowledged reports of people being unable to make payments and said it was investigating the situation. Citizens Bank also reported minimal impact, with tech teams monitoring the system and resolving issues. Similarly, KeyBank, Interactive Brokers, and Ally Financial confirmed that their systems were fully functional.
The Clearing House Automated Payment System (CHAPS), used by UK high-street banks and lenders to send money to each other, experienced a significant outage on July 18, 2024, causing severe problems in the UK. This was followed by a Microsoft outage that affected banking firms worldwide. These incidents highlight the vulnerabilities of existing payment infrastructure and the need for modernization and enhanced operational resilience.
The impact of these outages extends beyond the financial sector, disrupting travel companies, healthcare services, and even 911 call centers. CrowdStrike CEO George Kurtz emphasized that the issue was not a security incident or cyberattack and that a fix had been deployed.
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Vulnerability of banks to mass outages
The vulnerability of banks to mass outages was recently highlighted by the CrowdStrike incident, which impacted a variety of industries and services worldwide. CrowdStrike is a cybersecurity company that provides anti-cyberattack services to Microsoft and other large companies. The outage was caused by a defect in a single content update for Windows hosts, affecting companies that use Microsoft.
Many banks and financial apps were affected by the CrowdStrike outage, including Bank of America, US Bank, and Wells Fargo. Some of the most commonly reported problems included online banking, mobile check deposits, funds transfers, and mobile banking. Major financial services in the US remained operational, but some reported issues. For instance, Charles Schwab posted on its website that certain online functionality may be unavailable, and TD Bank confirmed that while the majority of its impacted systems had been restored, customers may experience intermittent service impacts.
The CrowdStrike incident has raised concerns about the resilience of banks and payment systems in the event of a major cyber incident. If a single error by a technology company can cause such widespread disruption, it is clear that banks need to ensure their operations are robust enough to withstand future cyberattacks. This may include having multiple payment methods and systems available, as well as investing in more sophisticated preventative measures that incorporate real-time data and AI.
While the CrowdStrike outage was not a cyberattack, the increasing frequency of outages and hack threats underscores the vulnerability of banks and the potential for massive disruption. With so many businesses and public services relying on a handful of IT companies, there is a limited ability to mitigate the associated cybersecurity and operational risks. As digital payment methods become more sophisticated, it is also important to ensure that cash remains a viable payment option to mitigate the impact of outages.
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Banks' need for robust operations
Banks are increasingly reliant on technology to deliver services, and any IT outage can have a significant impact on their operations. In July 2024, a global technology outage affected multiple industries, including banking and financial services. While some banks were largely unaffected, others experienced issues with online banking, mobile banking, deposits, and payments.
To ensure robust operations, banks need to adopt a strategic approach that balances cost-cutting with investments in technology and process improvements. This includes leveraging cutting-edge technologies like AI, machine learning, and robotic process automation (RPA) to drive operational efficiency. By automating manual processes, banks can improve accuracy, speed, and productivity while reducing costs.
Additionally, banks must prioritize customer needs and preferences to achieve operational excellence. This involves understanding customer data and real-time analysis to deliver hyper-personalized experiences across multiple channels. Banks should also focus on optimizing channels such as contact centers, online and mobile banking, and relationship management to meet changing customer expectations.
Furthermore, banks need to modernize their operations to maintain competitiveness in the face of increasing competition from fintech companies. This includes extracting insights from customer data, growing their wallet share, and accelerating growth while maintaining compliance with regulatory and risk standards.
To achieve sustainable operational efficiency, banks must rigorously apply cost-saving measures across their entire operations and strategically invest in technology to meet business needs and yield tangible benefits. By taking a robust approach to strategic planning and identifying opportunities to differentiate themselves, banks can solidify their market position and ensure robust operations.
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Frequently asked questions
Many banks were affected by the CrowdStrike outage, including Bank of America, TD Bank, US Bank, and Wells Fargo.
The outage caused issues with online banking, mobile check deposits, funds transfers, and account balances or transactions. Some customers were unable to access their online banking at all.
The outage was caused by a defect in a content update for Windows hosts. The update was pushed by US cybersecurity firm CrowdStrike to its corporate clients.
