IT Outage Shakes Global Banks and Brokers: Trading Processes Affected

On Friday, global banks, brokers, and financial technology companies including JPMorgan Chase, UBS, and Bloomberg were hit by a worldwide IT outage, which led to some traders being unable to access their systems to complete transactions. JPMorgan's trading systems were affected, as were UBS and fintech firm ION Group. Users of Bloomberg terminals also faced issues and disruptions before the UK market opened on Friday. Broker CMC Markets reported problems affecting access to their trading platforms. Bloomberg stated that some customers experienced interruptions in using the Bloomberg Terminal and other services due to a third-party outage. JPMorgan, UBS, and ION declined to comment. "It’s a mess," said a senior trader at an asset manager. "This is the biggest disruption in years." While the major trading venues remained open as usual, issues at banks and brokers hampered traders' ability to access their systems and complete transactions. Some brokers were forced to instruct their clients to place their orders elsewhere, according to two traders. The disruptions were caused by a software security update from the U.S. company CrowdStrike, which led to problems with Microsoft systems. The London Stock Exchange Group stated that trading on their platforms was running normally, but their news service had issues, with only a handful of stories published on Friday morning. LSEG reported a "third-party technical issue" affecting some of its services. LSEG is working closely with Microsoft, which acquired a 4 percent stake in the company and obtained a seat on the board in 2022. Trading venues such as Nasdaq, Euronext, Deutsche Börse, CBOE, and Tradeweb reported being unaffected by the outage. "People can trade, but [there is] limited upside unless absolutely necessary," added the senior trader. "Traders need to be confident that the data they are trading on is accurate." The UK's Financial Conduct Authority and payment regulators, as well as the trade association UK Finance, stated they were in communication with financial services firms to better understand the extent of the outage. Shares in CrowdStrike dropped sharply in pre-market trading, down 12 percent before the New York open. Microsoft saw a 1.5 percent decline in pre-market trading. There were few signs of broader market impacts from the outage on Friday. The Stoxx Europe 600 was down 0.6 percent, while S&P 500 futures remained unchanged.