Central bank to investigate BSP
4 June, 2023, 2:48 pm
The Bank of Papua New Guinea (BPNG) is set to conduct investigations into BSP once its completes the process for its core banking migration.
This comes after business houses called for the central bank to investigate BSP’s failure to fix their banking system and services after the ongoing issues with their services following the rollover from their old core banking system to the new flexcube system back in April.
Acting Governor Elizabeth Genia told the Post-Courier that BSP is an important institution within the PNG financial system, because of its size, market share and reach in PNG and across the South Pacific region and its dominant position in its market sectors, the effectiveness or otherwise of its systems have a significant impact on PNG and the region.
Ms Genia said BPNG will continue to monitor all the issues raised weekly with BSP, as well as the actions taken to remediate those issues.
“BSP is an important institution within the PNG financial system, because of its size, market share and reach in PNG and across the South Pacific Region. Because of its dominant position in its market sectors, the effectiveness or otherwise of its systems have a significant impact on PNG and the region, said Ms Genia
“BSP’s old Integrated Core Banking System (ICBS) was outdated, had poor user interface and limited risk management and analysis capabilities. Such a system presented a considerable risk to the entire financial system in the region. It needed to be upgraded or replaced.”
The new core banking system, Flexcube, aims to enhance customer experience, through improved features. It also aims to improve cyber security to protect depositors’ funds, by providing greater security features.
Most functions of the new Flexcube system are functioning well. Branch operations, ATM, EFTPOS, mobile banking, internet banking, domestic payments and end of day processing are all operating as business as usual.
Ms Genia said, however, there is a backlog relating to international payments and domestic payments. BSP has allocated additional resources to clear them quickly. BSP has assured BPNG that the backlog will be cleared within the next two weeks.
She said it is important to acknowledge the massive scope of the system upgrading.
She said over the weekend of the actual implementation several shifts, involving more than 100 staff, enabled the work to continue. Vendor support continues to be provided until the system is operating smoothly.
BPNG has been working with BSP continuously, to help them deal with the issues that unfolded as the upgrading process progressed. For example, at the initial stage BPNG staff were deployed to the provinces to monitor and report on the local situations as the upgrade commenced.
BPNG conducted regular meetings with BSP senior management throughout the upgrading process and intervened to raise concerns and offer potential solutions. BPNG’s interventions dealt with constructive recommendations for BSP to resolve issues, such as:
– Inform the public on the actions undertaken;
– Attend to individual clients;
– Meet with firms with payment issues;
– Develop a customer expectation strategy and program; and
– Focus on firms with international transactions to encourage goods and services suppliers to maintain services.
To assist with processing, BPNG extended trading of the Kina Automated Transfer Systems (KATS) beyond normal trading hours.