Review finds room for improvement in payment clearing processes

Report ordered after technical glitches hit Ulster Bank customers last year

A review of the State’s payments clearing process, ordered after a technical glitch hit thousands of Ulster Bank customers last summer, has recommended a number of improvements. Photograph: Frank Miller/The Irish Times.

A review of the State’s payments clearing process, ordered after a technical glitch hit thousands of Ulster Bank customers last summer, has recommended a number of improvements. Photograph: Frank Miller/The Irish Times.

 

A review of payment processing systems used by the State’s banks, ordered after issues at Ulster Bank affected tens of thousands of customers last year, has recommended a number of improvements.

The review was requested by the Central Bank after a technical glitch last summer significantly hampered Ulster Bank’s ability to process electronic payments. It affected the accounts of some 100,000 clients for several weeks.

The issue meant that certain transactions, including salaries and social welfare payments, failed to appear in customer accounts on time.

The independent review, by BH Consulting, examined risk assessment and risk management processes employed by the Irish Payment Services Organisation and its members such as AIB, Permanent TSB, Ulster Bank and Bank of Ireland.

BH Consulting found IPSO’s risk management process to be “relatively robust” but recommended several changes to the current system.

It concluded that the time between risk assessments should be halved from the current period of every two years to annually. The review says such a measure should ensure assessments are in line with the latest risks and threats, and that staff remain familiar with the process.

It recommends IPSO and its members align their risk management processes to an industry recognised standard and that adherence to this standard be independently verified.

The review also found that risk assessments should focus on payments systems as a whole rather than looking at individual elements.

IPSO chief executive Pat McLoughlin said the organisation and its members had agreed to implement the recommendations and were committed to taking steps that guaranteed customers trust in the safety of their payments.

The Central Bank welcomed the report and said it would work closely with IPSO to oversee and monitor the implementation of “these actions to strengthen the Irish Payments Systems’ risk management processes”.