By Rarzack Olaegbe
The parent’s job is never done. It is a lifetime career. Changing diapers. Singing a lullaby. Sending parachute money. It is akin to a public quoted company in a start-up mode.
Robert and Barbara Behan are model parents. They had sent $10,000 to help their son and his young family. As a Christmas gift, the money will help the son to complete a basement repair. But the son did not receive the cash.
Oh, what could have happened? The distraught parents have been battling TD Bank and CIBC for months. They wanted to unravel how the $10,000 they wired to their son ended up in a stranger’s account.
TD is safe. It is a reliable way to send money online. But there were glitches. TD proved otherwise. The fund was transferred from the couple’s TD Bank account in Penetanguishene, Ontario on December 21, 2021. It was done through a CIBC branch in Calgary. Their son has been banking with CIBC for decades. But the money did not get to his account.
Weeks later, CIBC told the Behans the money was gone. It was deposited into someone else’s account the day it was sent. The person who wrongfully received the cash in his account withdrew the $10,000 the next day. And shut down the account.
“It’s inconceivable. Apparently this person had the exact same account number as our son,” Mrs Behan said.
But CIBC failed to match the son’s account number with his name. The bank just put the fund into the wrong person’s account. It wasn’t checked. After two months of battling the banks, CIBC’s ombudsman gave its verdict. The bank was not guilty. It offered $5000 as a goodwill gesture. But the bank repaid the $10,000 after Go Public contacted it.
On the one hand
Fintech is not perfect. Problems can occur. Machines may malfunction. Things may not be like clockwork. That is because Fintech firms manage vast amounts of transactions on behalf of the users. Take, for instance, the recent failure of the digital investment management (DIM) platform, StashAway in Malaysia.
The bank accounts linked to StashAway’s direct debit feature had been incorrectly debited 27 times. That is 27 times!
In a post-mortem, StashAway explained that technical issues caused the glitch. It involved a third-party direct debit provider, Curlec. What StashAway’s system thought were failed direct debit attempts were successfully processed. This had resulted in more than 40,000 direct debit requests. Instead of 1,500. In technology, there is the concept of blameless post-mortems after every incident. It allows incidents to be analysed. And the team can learn from it. Instead of finding out who is to blame for it. It is similar to the ‘black box’ analysis after a plane crash. StashAway carried out a post mortem.
Khairil Abdullah, CEO of e-wallet platform Boost, said there are several positives from how StashAway handled the incident. One that stood out was the quick response to the incident. StashAway was able to process 95% of the refunds. This came one day after the glitch was discovered. StashAway demonstrated accountability. It was possible because it emphasised the value of trust in the ecosystem.
On the other hand
Most Fintech companies are regulated. They are required to adhere to certain security standards. This is necessary to ensure consumer protection. That is why Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) is unhappy. Its executive vice-chairman, Babatunde Irukera has asked the banks to establish a service level agreement with other service providers. Why does he want this? He said it will reduce fintech-related challenges being faced by the customers.
He is unhappy. He frowned at the practice where the banks have abandoned the customers in the past when glitches had occurred. The agency is working on a policy guideline. To correct the anomaly.
“In that ecosystem, the banks must have their service level agreements on how to reconcile. That is the service level agreement we insist must exist within the ecosystem.’’ He told the News Agency of Nigeria.
On this side
Why do some financial institutions shirk their responsibilities?
It is a system error, Bigmummy.
What do you mean, please?
If there is a glitch in the system, you can commandeer a cash-laden bullion van to be driven into your compound. And no one will query you.
What do you mean, please?
If there is no glitch in the system, a failed debit will get a quick response. It is like a parents’ job. There is no service level agreement. There is no glitch. What you get is pure service.
