NZ banks centre of security report speculation

The State Services Commission (SSC) report into key threats to New Zealand's critical infrastructure raises speculation that the country's banks are looking to move their processing operations offshore, to Australia.

The State Services Commission (SSC) report into key threats to New Zealand's critical infrastructure raises speculation that the country's banks are looking to move their processing operations offshore, to Australia.

As reported in Computerworld on Monday (see SSC wants denial of service attacks made illegal), the report, released by the SSC's e-government unit and entitled "Protecting New Zealand's Infrastructure from Cyber-Threats", highlighted concern at the "desire of some New Zealand banks to move their retail processing offshore".

According to the report at least one has already done this and others are considering the move. ANZ has confirmed it moved its core processing from New Zealand to Australia nearly two years ago. A central data centre, in Melbourne, houses the mainframe processing and data storage, which handles all customer information. Branches in New Zealand continue to undertake retail processing.

ANZ media relations manager Rita Zonius says the decision to centralise the system was made in order to standardise its platform.

"Eftpos NZ [which is owned by ANZ] and ATM processors still sit in New Zealand in data centres in Wellington and Auckland. Telephone banking in New Zealand also sits domestically, as well as several back-office systems such as mortgage operations."

Westpac Banking spokesman David Lording says it has no plans to relocate New Zealand computing operations.

"You could discount us; we are not moving WestpacTrust's processing offshore."

The report refers to Reserve Bank plans to move the computers for its "real time gross settlement" to Australia. This system manages the relative position of all New Zealand banks and is core to the banking system.

"The RBNZ is moving to interdependency with international banking, a move that the rest of the New Zealand banking sector also appears to be adopting," the report says.

The computers for the "Austraclear system", currently operated by the Reserve Bank, are also being moved to Sydney. Austraclear is the main means of settling debt securities transactions in New Zealand and is crucial to New Zealand financial markets. "

There are two main risks in the movement of banking systems offshore. Firstly, adverse events in Australia, such as industrial action," according to the report. The second problem it outlines was that of telecommunications failure.

"This threat has to be seen as one of low likelihood … but high impact."

The report says a move offshore by banks would increase New Zealand's reliance on "extended telecommunications paths" and "perhaps raise issues of sovereignty".

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