UnionBank addresses systems glitch

Published June 12, 2021, 11:58 AM

by Lee C. Chipongian

Union Bank of the Philippines (UnionBank), one of the leaders in digital banking in the country, said it is addressing a three-day systems glitch where its deposit and auto reversal system is not working.

According to UnionBank, they are undergoing “system maintenance” since Thursday where “reversals for affected transactions are ongoing.” This has left clients unable to access their funds with the bank.

On Thursday, digital wallet GCash, the e-money business of Globe Telecom, issued an advisory that GCash InstaPay transfers to and from UnionBank were problematic but reported that services “have been restored”.

UnionBank First Vice President James P. Ileto for corporate and media affairs said the bank “is in the process of addressing affected transactions at the soonest possible time.”

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier is looking into the bank’s systems glitch. “It seems that the issue is isolated to InstaPay transfers,” Fonacier said today ,Saturday, June 12, 2021. InstaPay is an electronic fund transfer service.  

The Aboitiz-led bank is one of the first big banks to apply for a digital bank license with the BSP.

Transactions such as fund transfers to UnionBank are still in a “floating” phase with clients unable to make digital withdrawals or other interbank or e-wallet transfers.

BSP Director Mhel Plabasan of the Technology Risk and Innovation Supervision Department said there was “bad outage (in) the last two days” but “everything looks back to normal starting this morning (Saturday).”

“We are awaiting post mortem report from the bank. Action on affected transactions is also ongoing,” said Plabasan.

Industry sources said this is an ongoing systems glitch. Normally, when doing ATM or digital transactions such as withdrawals, there are three steps that will tell a client the transaction has been completed.

Step one is that the source account is debited, and step two is that the transfer is conveyed through BancNet/InstaPay. Step three is that the target account is credited.

What is happening with UnionBank is that step three is not successful and funds are left floating because the bank has yet to reverse it or return to the source account. This seems to imply that the bank’s deposit system is problematic because they should have been able to verify the transfers and credit it to their clients’ accounts, the source said.

Bank system glitches are normal in a digitalized banking world. Banks also deal with threats of cyber-related attacks on a daily basis. Banks are required to report to BSP within two hours of first detecting a suspected cyber crime, and to report within the day for system glitches.