The problem began last Tuesday, as brokers were returning from the Labor Day weekend. They discovered they couldn't log on to Smart Station, a desktop application that sends and retrieves client information to and from Beta Systems, Wachovia Securities' back-office system. Both Smart Station and Beta Systems are provided by Thomson Corp. Over the Sept. 4 weekend, a proprietary system from Prudential Securities, which had merged with Wachovia last year, was switched over to the Wachovia system. The spokesman says that the switchover was successful and that the company had identified the causes of the problem, though he couldn't provide those details.
The Smart Station problem was resolved by Wednesday; in the interval, the company implemented backup systems to replace Smart Station. Certain components of Smart Station have been removed for testing offline, but they do not impact its operation, the spokesman says.
Then on Wednesday afternoon, Beta Systems, the back-office system, suffered a 22-minute outage during which brokers couldn't access client data. On Thursday, in Winston-Salem, N.C., where much of Wachovia's operations are based, another software glitch produced a slowdown in system performance; that problem was swiftly corrected.
It's not clear whether the separate problems were isolated or connected. Plans for the switchover had been going smoothly, and no problems were evident during testing. A Thomson executive wasn't available for comment.
The fact that customers weren't adversely affected places the problem in a less serious light for Wachovia, says Celent Communications analyst Jodi Burns. If customers had been affected, the repercussions for Wachovia could have been serious, including lawsuits and regulatory actions. As it is, she says, Wachovia technicians are trying to "pry apart the pieces" to discover what went wrong.