by Mark O’Byrne, Goldcore:
– ‘Technical issue’ at Fidelity temporarily blocks access to online accounts and halts online trading
– Fidelity is 3rd largest brokerage by client assets: $1.7 trillion at the end of 2016
– NatWest, RBS, Ulster Bank have experienced online banking “issues” in November
– Clients left without access to funds & failed payments & little to no recourse
– Social media exposing the banks’ and online trading platforms’ shortcomings
– Reminder that online accounts can be rendered non-viable and vulnerability of absolute dependence and digital cash, digital gold etc
Yesterday, customers of Fidelity, the third largest brokerage in the world, found themselves unable to access their online accounts.
The company is responsible for an estimated 8% of total US wealth management. With such a huge responsibility, Fidelity, like most companies, works hard to ensure clients have access to online accounts at all times.
Yet it still happened, reminding investors of the risks posed by digital assets – be they stocks, gold or indeed deposits – held solely through online accounts and platforms – the ‘Single point of failure’.
Fidelity is just one of many online “outages” or “glitches” reported by financial institutions in the last year. In Europe, particularly the United Kingdom, banking customers have found themselves regularly facing bank account ‘glitches’. It is thanks to social media that some of these even come to the fore, with many organisations keen to sweep them under the carpet.
Investors, savers and, in fact, any user of online services needs to be aware of the risks and how to protect themselves in the case of a sudden ‘access denied’ message or worse, a prolonged period of not being able to access, trade and or withdraw funds from an online account.
Not like the old days…
Prior to online accounts it rarely occurred to users that they could suddenly be without access to funds, unable to make transactions or even receive their wages. Sadly, with the dawn of the internet and growing cyber security risks this is something no-one can afford to be without a plan-B for.
Outages can happen for a number of reasons, but many result in customers being unable to transact and being without funds.
In the case of Fidelity, it appears to have been an internal error, which also seems to be the common thread among many banking outages. However, cyber security is a major threat to any account that involves personal data and financial information.
Just this week Uber finally admitted exposing hackers to over 2.7 million customers’ data, putting savings and futures at risk.
We must also consider what happened in Puerto Rico for a lesson in how vulnerable we are should natural disasters impede access to much needed personal funds for days and weeks.
Absolute reliance on online accounts and digital cash and digital gold is not prudent. When such accounts can be rendered non-viable in a matter of seconds, there is little recourse for the digital saver and investor should they not also own some tangible assets.
Social media prevents cover-up
Online account failures are becoming more common. We are increasingly aware of this thanks to social media. Whilst the majority of outages experienced in the West are resolved within a few hours (in the case of Fidelity it was hours) or days, customers are left feeling nervous and frustrated and in some cases they experience real repercussions. Rents are not paid, important direct debits fail and charges are incurred.
This last month Lloyds and Halifax Bank of Scotland experienced major issues with accounts. Some account holders not only found transactions weren’t processed but also logged in to be told they no longer had an account with their bank.
Many customers in the recent Natwest outage were particularly frustrated at the bank’s lack of communication and failure to alert account holders to the problem.
“Not just an online problem, my bank card is not working now as well for online payments! People have bills to pay, how much longer?”
“You were acknowledging this problem over an hour ago but only to those that tweeted you directly. Why has it taken so long for a public tweet?”
Read More @ Goldcore.com