The Banking Executive Magazine - August 2024 Issue

INTRODUCTION This article sheds lights on the global Information Technology (IT) outage that happened in July 2024. The cause for the IT outage is examined and its global impact is assessed. The monopoly from big technology (BigTech) and the wrong European Union (EU) regulation blamed for the outage are considered. The World Economic Forum call for enhanced cyber resilience is stressed. General causes for IT crashes are presented and various strategies and measures to prevent future IT outage are out- lined. The article concludes with the call of the Union of Arabic Banks for the formation of a universal ecosys- tem to prevent global IT outage and the establishment of an independent body for the control and develop- ment of technology at the global level. THE 2024 GLOBAL IT OUTAGE On 19 July 2024, American cyberse- curity company CrowdStrike distrib- uted a faulty update to its Falcon Sensor security software that caused widespread problems with Microsoft Windows computers running the software. As a result, roughly 8.5 mil- lion systems crashed and were un- able to properly restart in what has been called the largest outage in the history of information technology and historic in scale. The outage disrupted daily life, busi- nesses, and governments around the world. Many industries were affected including airlines, airports, banks, hotels, hospitals, manufacturing, stock markets, broadcasting, gas sta- tions, retail stores, as well as govern- mental services, such as emergency services and websites. The world- wide financial damage has been es- timated to be at least US$10 billion. Within hours, the error was discov- ered and a fix was released, but be- cause many affected computers had to be fixed manually. ABOUT CROUDSTRIKE T HE COMPANY THAT CAUSED THE GLOBAL IT OUTAGE A software update from a single cy- bersecurity company, CrowdStrike based in the United States, was the root cause of the chaos, underlining the fragility of the global economy and its dependence on computer sys- tems to which relatively few people give a passing thought. Software up- dates are a critical function in society to keep computers protected from hackers. But the update process itself is crucial to get right and to safeguard from tampering. Towards a Universal Ecosystem the BANKING EXECUTIVE 8 ISSUE 188 AUGUST 2024 TOWARDS A UNIVERSAL ECOSYSTEM TO PREVENT THE GLOBAL IT OUTAGE BY DR SOHA MAAD