Wells Fargo Puts ATMs Through Big Crisis Test
Heeding regulators' calls, Wells Fargo Bank conducted a thorough test last week of a disaster recovery plan for its automated teller machine network.
The $45 billion-asset bank shut down computers supporting ATM operations at its San Francisco data center Nov. 9 and 10 to see how well the secondary data site in Los Angeles could work on its own.
"In California, we are attuned to disaster," said Loraine Boland, vice president of electronic banking at San Francisco-based Wells Fargo. "We want to see how we react if one of our centers is knocked out - and simulations simply don't cut it."
Since 1987, the Office of the Comptroller of the Currency has required financial institutions to draw up detailed plans for restoring their major computer operations in the event of a disaster.
Busy Days for Examiners
But, because the office has been involved with the banking industry's ongoing loan troubles, few OCC examiners are free to investigate whether banks' disaster recovery plans are feasible.
With technical audits unlikely, the backup plans outlined by financial institutions often go untested until they are needed in an emergency. Experts said banks' ATM networks are among the least likely candidates for live testing because of the bad impression such a test might leave with customers if it goes awry.
"Banks are supposed to test their recovery abilities for all their mission-critical applications," said Joseph Ziskin, a senior manager at Ernst & Young's center for information technology and strategy in Boston. "Unfortunately, ATMs are a little too visible to the customer for most banks to risk running a test that fails."
Most Service Continued
During the test at Wells Fargo, half of the bank's 1,600 ATMs were shut down for about 16 hours. According to the bank's plan, about 800 of its machines are wired to the northern data center, 800 to the center in the south.
Because 98% of the Wells' ATM sites have multiple machines, only a few sites were totally without service during the test.
To avoid any bad impressions that might result from out-of-service ATMs, the bank notified customers of the dates and purpose of the test a week in advance. "The fact that [the ATMs] were down wouldn't be any secret, and we wanted to let them know that there was a purpose to it," Ms. Boland said.
In addition, Wells waived any fees if the customers chose during the test to use other institutions' ATMs in the Star System and Plus System networks.
Jack Farsht, a national bank examiner specializing in bank data processing at the OCC, called the real-life test "a great idea. We applaud any efforts at testing actual system response."