CBA assures tech foundations are sound despite outage

A Commonwealth Bank group executive said the bank's technology foundations are sound and "in good shape", despite a near full business day digital system outage on Monday.

Speaking at a Trans-Tasman Business Circle event on Tuesday, group executive institutional banking and markets at CBA Andrew Hinchliff said “resilience can mean a lot of things”, stating “you always want to make sure that your systems are up and running for the economy”.

“Unfortunately, we had visibility into that yesterday,” Hinchliff said.

“It hurts us when that happens. We've spent a lot of time and money making sure our tech foundations are in good shape.

“We've also got failover, sometimes that doesn't go quite right. But for the most part, we work very hard to make sure those foundations are really good.”

Hinchliff also defended the bank's governance, both technology and otherwise, as a factor in planning for resiliency.

“You've got to understand what the [key risk indicators] of the metrics are [and] your risk appetite statement that should be boiling up through the various governing committees, ultimately to the board, so we can work out where do we think potential points of interest or break points actually are," he said.

He added scenario planning and stress analysis is “one of the most important things we learn” and undertake at the bank, involving “full days out, running through various scenarios around cyber or other potential events.”

“I think the only way you start to get good at enacting some of these policies is actually practicing - truly putting yourselves under stress and working out what is the decision we're making look like in those times," Hinchliff said.

He added debriefing post-event to assess lessons, to “look at what went well, and then what didn't go well and then how do we enshrine what went well how do we never do what went badly again", is important.

“There's this constant learning because, frankly, … things will go wrong," he said.

“It's how you respond to it, how you show up and how you make sure we just don't repeat the mistake.

“That to me is about good culture and good risk culture, which we're working very, very hard on across the bank."

Digitisation and generative AI

At the event, Hinchliff also said the bank “needed to be aware of the potential dark side of AI", and that the technology "will need a carefully coordinated policy response from government” moving forward.

CBA sees the generative AI opportunity as "enormous", citing productivity and customer experience benefits.

Echoing similar comments from the bank's chief data and analytics officer Andrew McMullan, Hinchliff said CBA is “extraordinarily aware of the risks associated with [AI] and [the] need [for a] good policy response in helping us manage all of this.”

He listed a few ways CBA has already implemented machine learning and AI, including its benefit finder tool and fraud detection features.  

“There are going to be many, many more use cases and apps that are developed across AI, we've been a long-term investor in H2O.ai," he said.

Hinchliff said the bank "need to make sure that we're transparent and fair in the way we manage AI models”.

“We should always be asking the question 'Should we?', not 'Can we?' … and that's at the heart of our governance and our policy," he said.

“We see an increasingly important role for AI and, I think, data and analytics in general."