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  • [Asian Banks Face Y2K] Taiwan Financial Industry Makes Headway on Y2K Problem
  • October 20, 1998 (TAIPEI) -- Under close supervision of Taiwan's Ministry of Finance (MOF), the local financial industry is well on the road to dealing with the "millennium bug," which threatens to bring computer systems to a halt when the year 2000 arrives.
    MOF demands that computer systems profoundly affecting public interests like those used for banking, securities transactions, international trade, custom clearance, financial settlements and business management systems be modified by the end of 1998 and fully tested within another six months.

    The Taiwan government has been pushing for a sweeping program as well as a timetable requiring all information systems to be replaced or revised in order to be Y2K-compliant.

    Government organizations at all levels and private enterprises in different business lines are being put under the supervision of various task forces to ensure system modifications are being carried out.

    Financial institutions in particular -- from banks, insurance firms, securities brokerage houses, futures trading companies and custom agencies to taxation agencies -- must each file a monthly report with the Bureau of Monetary Affairs under MOF. The report has to specify how far the institution has updated its computer hardware and software systems, as well as how complete backup systems are established. They are also required to perform a few test runs by the end of 1998 and comprehensive tests by June 1999.

    These institutions usually go to the original suppliers or agents of computer systems for hardware replacements and software revisions. IBM Corp., Hewlett-Packard Co., Digital Equipment Corp., Electronic Data Systems Corp., Novell Inc. and Computer Associates Inc. are mentioned frequently. There are also dozens of local consulting houses helping clients cope with the impending crisis.

    The financial burden for modification varies from one institution to another. For decades-old banks, this is an opportune time to replace antiquated mainframes, and the costs may run as high as millions of U.S. dollars.

    Younger establishments operating on modern systems only need to load Y2K-compliant operating systems provided by the original vendor and perform checks on application programs custom-developed by in-house staff. The cost for such limited adjustments is in the US$100,000-range, including software tool packages to comb source code and then fix the myriad locations of date fields in the program.

    Some of the leading banks here have finished system transformation and conducted a couple successful test runs, even on international communication systems such as the Society for Worldwide Interbank Financial Network. Smaller financial institutions, such as credit divisions of farmers' associations or fishermen's associations, may be less aware of the Y2K problem.

    Luckily, their transactions are processed at several joint information/computer centers region-wide. And people running these centers are IT professionals fully aware of the crisis and able to properly deal with it.

    MOF is also working on contingency measures to back up computer operating systems in case problems do occur.

    As with any other issue, a "carrot and stick" mentality is helping to motivate actions. Following the announcement in the United States and United Kingdom to exclude coverage of Y2K-caused damages, local non-life insurance companies have also decided not to cover possible financial losses arising from failure to neutralize the Y2K problem.

    (Charlene Huang, Asia BizTech Correspondent)

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    Nikkei BP BizTech, Inc.
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    Updated: Mon Oct 19 17:51:16 1998 PDT