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Posted : 2011-04-14 16:43
Updated : 2011-04-14 16:43

NH blames IBM for network crash


Employees at a Seoul branch of NH Bank, the financial services unit of the National Agricultural Cooperative Federation (Nonghyup), are seen at the office Wednesday, a day after all financial transactions for the bank’s 30 million customers came to a halt after its electronics network crashed. NH Bank was only able to normalize its system on Thursday. / Yonhap

Bank struggles to repair electronic system, deal with customer complaints

By Kim Tae-gyu

All the disruptions of the financial transactions for Nonghyup banking customers this week originated at the computer of an IBM employee, who works in the bank’s information technology center in southern Seoul in an outsourcing contract between the two entities.

Nonghyup, otherwise known as the National Agricultural Cooperative Federation, confirmed Wednesday that the ``ground zero’’ of a terrible information and technology (IT) accident in the financial sector was somehow connected to IBM.

Since Tuesday afternoon, most financial services became unavailable at Nonghyup outlets and its automated teller machines (ATMs) resulting in major inconveniences and complaints from its 19 million clients. Operations began returning to normal on Thursday.

``The laptop of the IBM worker at issue ordered the deletion of execution files of our key systems, which involved more than one hundred IBM servers. This generated the service failure,’’ a Nonghyup official said.

``However, the employee seems to flatly deny any wrongdoing. We need to wait until ongoing investigations are completed to know exactly what or who caused all the trouble.’’

As soon as the system failure took place the nation’s financial watchdog dispatched IT specialists to the farmers’ bank to look into the situation.

Several possibilities have been raised that the IBM worker intentionally or mistakenly input the deletion orders or outsiders hacked the computer in question.

Some experts say that it cannot be just a blunder because the disaster recovery (DR) system, a back-up composed of IBM servers, was damaged along with the other servers.

IBM Korea is expected to come under fire for failing to properly manage the system, or at least the computer of its IT employee.

This is not the first time that IBM blundered in operating large-sized systems in outsourcing deals.

Midway through 2004, IBM Korea signed a 10-year contract with NHN, the country’s foremost Internet portal owner, under which the former took charge of the latter’s network operations.

Late that year, IBM Korea miscued exchanging server-related hardware for NHN to cause its frequently-visited website to freeze for almost an hour.

In March 2006 NHN users could not access its popular portal Naver for more than three hours as another local firm created an erroneous domain setting for the site. Four months later, Naver users could not update applications due to technical glitches in the site for around five hours.

NHN terminated the outsourcing deal with IBM Korea in late 2006, more than seven years earlier than initially scheduled, despite having to pay an undisclosed amount of penalties.

NHN did not specify the reason for prematurely ending the contract but observers say the error-prone services of IBM Korea were behind the move.

When contacted an IBM Korea spokeswoman declined to comment on the issue, saying the company is currently assessing the incident.

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