Published:
Dec 11, 2023
Author:
Sarah Parsons Wolter
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After a technology upgrade at Comerica bank in May, transaction errors in the new wealth management platform have left the general ledger of the bank’s own wealth management division in overdraft. As of September 30, 2023, Comerica had $175b in assets under management in its trust administration unit, which was affected by the upgrade. Executives told the bank staff that these errors could result in write-downs if unrecovered, and regulators are probing the bank to investigate the matter.
Erroneous transactions on the platform included trust-account payments failing to go through, getting posted multiple times and posting the wrong amount. In turn, Comerica ran into issues pulling in reimbursements from trust managers, leaving their own bank account in deficit. The platform has also crashed repeatedly. Less than $500k of funds have been written down so far, and employees have been directed to try and collect funds, according to the WSJ.
This technology upgrade had been planned for years but was held off due to unsuccessful test runs. When it was launched in May, some employees had reportedly voiced concerns that it was still not ready. The duration and effort going into implementing these technology updates demonstrates the complexity of financial institution technology stacks, as well as the magnitude of consequence associated with bugs, leaving room for modern technology architecture and sophisticated fintech players to create value. After all, a bank overdrafting on its own account is… almost as good as George Santos making bank on Cameo!
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Outstanding Overdraft
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