Japanese Banks’ Payment Clearing Network experienced a disruption on Tuesday, impacting transfers at 11 Japanese banks.
What contributed to the glitch remains unknown, however the Japanese Bankers Association believes it could be tied to updates on a relay computer program that took effect between Saturday and Monday.
For the time being, the Clearing Network is turning to a back-up plan and ensuring that funds in “already- accepted orders” are forwarded to the appropriate destination accounts. According to the Japan Times, Japan’s Clearing Network wasn’t the only one that experienced a recent hiccup. Similarly on Tuesday, Japan Post Bank also succumbed to an outage that rendered online services—including banking inquiries and mobile app transfers—inoperable.
The Call for Modernization
This may be the first time the Japanese Banks’ Payment Clearing Network has experienced a glitch of this type since its inception in 1973. As payments become more digitized, bank legacy systems are failing to keep up with real-time payment solutions, resulting in outages, glitches, and disruptions. For those on the receiving end, the results include a massive disruption in payments, loss of revenue, and ultimately, a loss of trust in traditional banking systems.
JPMorgan Chase reported an outage in July that put a halt to all Zelle transactions. Zelle later posted on X, indicating that everything was functioning on their end, while Chase was having an “issue with payment processing.” Clearly, real-time payment networks that were designed for app-based systems are incompatible with the current banking system that was originally designed to process checks.
There’s no question that legacy systems are the current achilles heel of traditional banks, but not addressing this crucial issue stands in the way of banks delivering the best customer service and earning a higher profit margin.
The answer for banks looking to modernize their legacy systems is to adopt cloud-based systems and a low-code environment. Cloud-based systems offer more flexibility and scalability than data storage offered by the company. If more capacity is needed, the bank only needs to increase the capacity via the cloud, without tacking on any additional hardware.
A low-code environment enables users to create and customize applications using pre-built templates and drag-and-drop interfaces.
