This bank's report indicates how vulnerable the banks are -- not to the Millennium Bug but to public relations handouts. But you must read between the lines.
This report says that all the banks must sink or swim together. True enough. Then it says not to worry: they are all on schedule. This requires proof. No bank has reached compliance. There is no model of success. There is no way to know if they are all on schedule. They will all be ready for testing on . . . ta, da! . . . December 31, 1998.
Yes, even in Ausralia, all projects will reach the testing phase on the same day that all projects will reach it in the United States. Such timing is inspirational, as miracles are supposed to be.
When almost no organization meets it, the public relations people will begin the "we're almost there, don't worry" stage of public relations. The senior managers will begin to execute their stock options on Jan. 2, 1999. Early retirement will become the escape route of preference. And the lawyers on both sides will begin drawing up forms.
They have all played the same game, naming the same date. In 1999, the panic will begin. It will be like nothing we have ever seen.
When 54% of the nation's medium and small firms say that they have no y2k problem, the entire banking industry has the y2k problem: the borrowers' default problem.
Then there are the 2,400 suppliers. How are they doing? The report doesn't say. They haven't all been contacted. But we know the answer: (1) most will not reply (they don't have to); (2) those who reply will be on schedule: December 31, 1998.
The report says that banks with complex supply chains are most at risk. The bank's report did not name itself as being at great risk, the bank has 2,400 suppliers. The author of the report has left us to draw our own conclusion: (1) the bank is not at risk because 2,400 suppliers which may all be noncompliant do not constitute a complex supply chain; or (2) the bank is at risk; or (3) the report is an exercise in deception.
But the bank's representative assured the Australian Stock Exchange that recent reports on the banking industry's lagging behind are "totally untrue." And when he says totally untrue, he means untrue, totally. You can take his word for it.
Or, if you're a depositor, you can go down and take your money out in cash.
His word or your money. Take your pick.
This is from the AUSTRALIAN FINANCIAL REVIEW (May 22).
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Westpac Banking Corporation is working with State and federal governments and industry groups to identify which of its customers are at high risk from the millennium computer bug.
From the work it has done so far, Westpac has found that customers who are reliant on technology, have long or complex supply chains, or large debt, are most at risk.
Small and medium-sized enterprises have also been slotted into the high-risk category following a survey commissioned by the Australian Bankers Association. (Forty-four per cent of the enterprises surveyed believed they did not have any work to do to address the millennium problem, even though 64 per cent of the sample group had computers.) . . .
Westpac told the Australian Stock Exchange yesterday that it was also contacting 2,400 suppliers to assess their millennium readiness.
Mr McPhee said yesterday that the banks were working closely together to ensure the banking system was compliant.
"If one of us struggles we will all be in trouble,"" he said. "We are working hard to ensure that we all make it."
He said in his opinion all banks were on track, and recent comments that St George was behind schedule were "totally untrue".
Westpac plans to be millennium-compliant by December 31, 1998, with final testing, outstanding issues resolution, and detailed contingency planning scheduled during 1999.