In a stunning twist, the Commercial Bank of Ethiopia (CBE), the nation’s largest financial institution, grappled with a major system malfunction on the morning of March 16, 2024, sending shockwaves through the digital banking sector.
The disruption, which unfolded over the weekend, resulted in a temporary halt of digital financial services across the industry, triggering widespread customer anxiety.
An unexpected surge in transactions overnight on Friday overwhelmed CBE’s digital platforms, allowing unauthorized withdrawals and transfers.
While industry sources reported approximately 66,000 customers conducting around 25,000 transactions totaling nearly 2.4 billion Br, CBE executives have yet to confirm these figures.
The malfunction, which credited transfers but failed to debit accounts, exposed vulnerabilities in digital banking infrastructure and the complex interdependencies within the modern banking ecosystem.
As the extent of the malfunction became clear, private banks were instructed to suspend all digital transactions as a precautionary measure to mitigate the fallout.
This move effectively paralyzed digital banking operations for several hours on Saturday, impacting services such as ATM withdrawals, internet banking, and mobile transfers between banks.
CBE’s official channels promptly issued apologies and reassurances, stating that there had been no external cybersecurity breach.
However, CBE President Abie Sano acknowledged the glitch as an internal issue, emphasizing that resolving the “inappropriate transactions” would require time and thorough investigation.
While operations eventually resumed, the incident did not go unnoticed by university students in various cities who exploited the glitch to transfer funds between banks.
Campus administrations swiftly urged students to return any improperly acquired funds to avoid potential legal consequences.
The incident prompted swift responses from the industry, with EthSwitch, a national switch operator, playing a crucial role in identifying and addressing the glitch.
Collaborative efforts among banks, facilitated by EthSwitch, led to immediate preventive actions, including blocking accounts potentially involved in the irregular transactions.
The disruption underscored the importance of robust mechanisms and cybersecurity measures in the digital banking sector.
Experts cited the incident as possibly stemming from a centralized ledger system glitch, emphasizing the need for continuous investment in cybersecurity and digital banking expertise to prevent future occurrences.
Despite previous efforts, including a multi-million dollar project to enhance digital infrastructure, the incident highlighted ongoing challenges in ensuring the reliability and security of digital banking systems.
Moving forward, stakeholders are expected to intensify efforts to strengthen cybersecurity measures and safeguard the integrity of Ethiopia’s digital banking ecosystem.
