Reproduced from the Spectator Australia, Flat White
Another day, another service outage from a major Australian bank which renders your money useless. It’s one thing for someone to nick your wallet – at least you’ve got a chance of fighting back – but quite another for that money to vanish while the wallet is in your hand.
Panicked ANZ customers trying to access their bank accounts were given the bland and unsettling ‘we’re working to resolve the issue’ message, which revealed very little about the scale or duration of the service outage.
Eventually, information filtered through about a possible third-party vendor. A revelation that raised more questions than it answered.
No one wants to believe how fragile the digital world is – until it dies. This false sense of security probably has something to do with the language programmers use to describe the digital framework.
Having your data hosted ‘in the cloud’ makes a server sound like ‘heaven’ – an ethereal realm impervious to harm.
Your data sits at the right hand of Zeus with a harp playing nearby.
In reality, servers are essentially computers sitting in a nest which are just as real and vulnerable as your laptop. Forget hackers or viruses corrupting your data, if an aggressive nation wanted to harm the West, a well-placed rocket aimed at a data server is all that’s required.
Cutting the undersea cables – where data runs like nerves beneath the oceans – is a temporary disaster. Reducing these data centres to rubble is an instant re-set to the early 1900s, except without any cheat notes.
The Inner Mongolia Information Park is the world’s largest data centre.
If Xi Jinping gets a little too friendly with Taiwan, forget about a hot war with the Chinese Communist Party. The cloud is a good place to start. Make it rain, as some pop star screeched. Of course there’s the hiccup that HP, Dell, and IBM are all clients. And that is one of the problems built into Western digital infrastructure – we went for cheap and convenient over secure and sensible. It is my personal opinion that the consequences of this choice will manifest very soon.
Given ‘the cloud’ is a physical place where your data is housed, one might imagine that crucial data is kept on Australian soil. As the world stumbles toward another major conflict, the urgency of safeguarding citizen data (especially when there are no longer paper backups) should be a priority.
It’s not as if Churchill would give the Cabinet papers to a German bank for safe-keeping during the war.
A nation cannot end up in a situation where the opening stages of war erase the banking sector and financial history. Having 26 million bank accounts set to $0 might have a few social consequences.
This threat was recognised by the Morrison government in 2022, with the Consultation on Australia’s National Data Security Action Plan. A pitch was made to force Australian banks to keep data housed on domestic servers.
I’m not about to heap praise on the Morrison digital dream. Most of what was penned by that government regarding our technology future ranged from unworkable to dangerous, but on this he had a point.
Aimed at safeguarding data from physical (rather than virtual) threats, banks argued vigorously against the plan. It would require significant investment on their part. There’s one thing the Big Banks have in common – they don’t like parting with your money.
The arguments offered were weak, indicating the policy would not protect against cybercrime (no one said it would) and may incur costs for staff (aren’t we meant to be creating jobs in the digital economy?), and we would lose access to ‘best-in-class’ data centres (which makes no difference if they are destroyed or taken hostage). Can you imagine a war where our hostage negotiations revolve around data? The substance of their refusal amounted to, ‘…but we don’ wanna!’
No one offered a reasonable half-way which would require backups to be held onshore and updated every 24 hours. At least this way the situation could be recovered. It’s like giving a spare set of keys to your mum. Is such a thing necessary? In 2018, the Commonwealth Bank admitted to losing 15 years of customer statements over 20 million accounts. Other major banks have lost customer data during technology upgrades. Instead of talking about security, Australia desperately needs to have a conversation about redundancy. A good, old-fashioned tech concept that has been forgotten in the age of streamlining and cost-cutting.
Returning to the cloud… The location of Australian data on foreign servers may seem obscure in the banking world, but consider that when he was Prime Minister, Scott Morrison voted to keep a Department of Defence contract with a Chinese-owned data centre after it switched hands from British ownership. No one is suggesting any wrongdoing, only the potential for complications. The Morrison government increased security and began the process of moving the sensitive military data, indicating that they acknowledged the risk and yet allowed it to happen, even though the sale was known about in advance. For all the things this country wastes money on, it never ceases to amaze what they skimp on.
Why does ANZ’s outage matter?
With Digital ID on our doorstep, and the push for a cashless society embedded in government and enacted independently by the Big Banks – the reliability of the digital realm is critical to the stability of Australia.
Imagine there is no cash, which is a likely reality by 2030.
The government has already said it wants all transactions to be digital and the government to vet all transactions via the Digital ID. (Voluntary, right?!)
This means that before you can buy something on Amazon or order your UberEats, the government Digital ID program has to verify your identity.
But that government database has gone down without warning. It’s been down for 24 hours and all you have is a reassuring message from the government saying they are ‘investigating the outage’.
You cannot buy anything or pay anything. You’re out of fuel stranded on the highway. You’re about to miss the payroll cut-off and incur the wrath of the government. You can’t feed your kids. You can’t get access to emergency supplies. You can’t pay the vet. You can’t pay your rent. You can’t do anything.
Suddenly, instead of a bank going down, the whole of Australia buckles under the single choke point of Digital ID.
And that’s only if it’s an accidental glitch. Imagine if it falls victim to a malicious attack…
So, you trust the digital world without a safety net if you like, but as someone who has grown up with computers and worked in the world of programming I can assure you that I don’t. I’ve seen enough tech support errors and outages to know that the key to success with technology is … having a backup. Having two backups.