THE banking sector lost an estimated $70 million after many internet-dependent transactions could not be processed because of the recent data blackout which lasted six hours.
BY TATIRA ZWINOIRA
On December 5, Zimbabwe experienced a major internet blackout as a result of a technical fault on Liquid Telecoms Zimbabwe’s main fibre lines coming from South Africa. This happened close to the Beitbridge border, on the South African side.
While millions of netizens were left stranded during the blackout, financial institutions saw their services grind to a standstill.
Internet-related financial services now contribute 75% of the revenue for the banking sector. Services such as point of sale (POS) transactions, the real time gross settlement system (RTGs), automated teller machines and mobile money were affected.
The banks’ dependence on the internet can be seen by the volume of transactions that are conducted as reported by the Reserve Bank of Zimbabwe’s (RBZ) weekly economic report in week ending December 1.
In the report, a total of $1,936 billion was transacted using the real time gross settlement system, cheque, point of sale machines (POS), automated teller machines and mobile, systems which to some degree rely on internet services.
The amount transacted was from a total volume of 20 826 614 transactions.
The internet blackout also revealed that many institutions are heavily dependent on Liquid Telecoms internet services and have few backup plans to fall back on in case of such disruptions.
In emailed responses to Standardbusiness, Stanbic Bank Zimbabwe CEO Joshua Tapambgwa confirmed that they had experienced service interruptions on all their online based platforms with services only returning later on that day.
“There was indeed an impact on revenue but our major concern was on how our service to our customers was affected, because our main obligation is on meeting our customers’ financial service’s needs,” he said.
“Technology is constantly evolving and we will continue to upgrade and maintain our systems to ensure that we continue to safeguard the interests of our customers.”
However, he said in such cases of a data blackout in the country, they did have a disaster recovery platform, which included fortified security measures.
CBZ Holdings CEO Peter Zimunya said the internet blackout affected their digital channels that relied on data services networks only.
“That means we experienced limited access on POS terminals on Econet and NetOne but Telecel was working, limited access on CBZ Touch services on Econet and NetOne and limited internet banking services for customers using data services,” he said.
He said CBZ Bank was well-prepared for service disruptions and had systems and procedures that they could fall back on.
Though most banks claimed to be well backed up, none was willing to provide exact figures of losses incurred during the blackout.
Such losses would have provided insight into the extent of the effect of the blackout.
Standard Chartered Bank Zimbabwe CEO Ralph Watungwa said his bank was sufficiently backed up in cases of such blackouts.
“Our systems are sufficiently backed up to ensure business continuity at all times. Our transaction processing is up to date,” he said.
In a recent interview with Standardbusiness, financial expert Persistence Gwanyanya said he was surprised by the disturbances that led to the disruptions of the internet services in the country.
“This is risky and costly to the economy. Imagine the amount of money that was lost by mainly the banking sector due to unavailability of internet at a time when electronic transactions are dominating. Banks and the economy as a whole could have lost millions of dollars due to these disruptions,” he said.
“This calls for urgent intervention by respective regulators and the concerned players to come up with a system of protection to the existing infrastructure as well as a backup system to minimise the risk of system disruptions as we have recently seen.”
The blackout also revealed that many financial firms do not have redundancy plans in place.
An earlier report by the Zimbabwe Information and Communication Technologies (ZICT) showed that banks were susceptible to cybercrimes and that more investment is needed in the IT departments of these financial institutions.
ZICT chairman Jacob Mutisi said it was only when the internet blackout occurred that they discovered that one internet gateway enjoyed the lion’s share of the market.
Liquid Telecoms provides the bulk of internet services in the country followed by TelOne, who also had one of their fibre lines cut accidentally in Kuwadzana by Harare City Council at the time.
“What worries me even more is that the ICT sector and the country did not have a back-up system in place. They had to make a plan to connect through Botswana after six hours in order for Zimbabwe to have internet access,” he said.
“In Zimbabwe banks use the internet as a means of transacting and obviously with this shutdown the ability to transact was impossible.”
He said that all internet service providers needed to come together and come up with a long-term solution that would prevent future blackouts.