BNY Mellon Unable To Run Payments For 19 Hours

Bank of New York (BNY) Mellon Corp. was unable to process payment instructions sent over the Swift Network from clients for a 19-hour stretch earlier this week. According to reports, the outage began around 2:30 pm on Sunday (Dec. 4) and was not resolved until about 9:50 the following morning.

Institutions that routinely use BNY Mellon to make hundreds of billions on payments on their behalf were affected by the outage as during that period BNY was unable to process payments on time. As of Monday afternoon, the bank was caught up, though the matter continues to draw internal scrutiny as some payments were unable to post by cut-off times Monday and were not formally completed until Tuesday.

Cheryl Krauss, a BNY spokeswoman, noted the outage “impacted our ability to send messaging to and from the Swift network.”

She further noted that the bank’s systems are now fully functional and that backup systems were now in place to prevent similar disruptions in the future. An internal memo confirms that Swift became aware of the issues as processing began to slow and then eventually stop as the bank lost connectivity to the Swift network. Though a technology vendor was eventually able to get them back online, initial attempts to do so quickly were not successful.

BNY requested an extension in the Federal Reserve’s Fedwire system for clearing payments. Extensions of this kind of occasionally granted, particularly when banks are facing unusually large payments volume.

As for why the issue arose at all, experts believe the root of the problem was a technological issue inside a single platform hosted by the banks. That system translates instructions from Swift messages to different business units.

People familiar with the matter said the root cause of the outage appeared to be a technological issue inside one of the platforms hosted by the bank that takes Swift messages and translates the instructions to different business units.

The incident comes as BNY Mellon is facing both increased scrutiny from Federal regulators — who worry about its size and systemic importance — and Swift officials who are monitoring member banks more closely following a string of cyber attacks in 2016.