Delta's CrowdStrike Lawsuit: "Testing and Certification Was Circumvented”

As we have discussed on this site many times, testing is crucial to ensuring seamless, secure, and efficient payment transactions.

Recent events underscore the potential fallout when technology fails on a grand scale, as demonstrated by Delta Air Lines’ legal battle with cybersecurity firm CrowdStrike following a system outage in July 2024. 

The incident not only disrupted millions of devices worldwide and had an estimated cost of more than $5 billion to Fortune 500 companies, but also led to the cancellation of 7,000 commercial flights, interrupting the lives of millions of individuals and businesses.

This event serves as a powerful reminder of why rigorous and comprehensive testing is so essential in mission-critical industries like payments, where downtime or security lapses can have catastrophic consequences.

The High Cost of Testing Failures

Delta’s financial losses provide a stark illustration of the high-stakes game companies play when they skimp on testing. The CrowdStrike outage not only resulted in direct financial losses - $380 million in reduced revenue and $170 million in additional costs - but also caused significant damage to Delta’s reputation, according to the company.

As a result, Delta is asking for damages to cover over $500 million in losses, along with litigation costs and punitive damages, according to CNBC.

What’s most notable for us here at Paragon, is that Delta’s lawsuit against CrowdStrike claimed that the security vendor "circumvented testing and certification processes” to expedite the rollout of a new release. “CrowdStrike caused a global catastrophe because it cut corners, took shortcuts, and circumvented the very testing and certification processes it advertised, for its own benefit and profit,” Delta said in its complaint. “If CrowdStrike had tested the Faulty Update on even one computer before deployment, the computer would have crashed.”

On the other hand, CrowdStrike maintains that Delta’s outdated IT infrastructure contributed to the incident, and has filed a countersuit claiming “Delta’s own negligence” led to its massive issues.

Why Comprehensive Testing Is Essential in the Payments Industry

When it comes to payments, availability, reliability, and security are paramount. A single lapse in testing can cascade into an event that disrupts transactions for millions, directly affecting consumers, businesses, even entire economies.

Testing plays an essential role in preventing the types of disruptions and security issues that can be catastrophic in the payments domain. Here’s why meticulous testing is particularly critical in this industry sector:

1. Reliability and Consistency: Payment processors and financial institutions handle a high volume of transactions that need to be processed instantly and accurately. Rigorous testing ensures that these systems can handle expected loads without failing, particularly during peak times.
   
   
2. Security Assurance: Payment systems are prime targets for cyber threats, especially as card fraud continues to increase. Comprehensive testing identifies potential vulnerabilities that could lead to data breaches, financial fraud, and other security threats. By uncovering and addressing these vulnerabilities early, businesses reduce the risk of damaging security incidents.
   
   
3. Compliance Requirements: Financial services are also subject to stringent regulations designed to protect consumer data and ensure reliable service - both at a legislative and card network level. Compliance testing verifies that systems meet industry standards, reducing the risk of legal issues and protecting companies from fines and penalties.
   
   
4. Customer Trust and Brand Integrity: In payments, reliability is synonymous with brand value. Customers expect perfectly executed transactions every time they pay. Any delay or disruption can damage brand perception. Testing ensures that companies maintain peak performance levels, fostering long-term customer trust and loyalty.

Need Help Creating a Resilient Payment Testing Environment?

The best defense against system failures, bugs, or costly disruptions is a thorough, well-structured testing strategy. Comprehensive testing allows companies to proactively identify and resolve issues before they impact customers, ensuring smooth, reliable operations.

For more than 30 years, Paragon Application Systems has been supporting the payment industry, partnering with leading issuers, acquirers, card brands, and networks to strengthen their testing capabilities. By working with Paragon, you gain access to extensive industry expertise, a history of innovative solution development, and a steadfast commitment to providing exceptional support.

Our advanced testing tools and simulators provide financial services companies with the speed, flexibility, and control needed to ensure optimal performance of mission-critical payment systems. With Paragon, you can confidently manage testing processes that prevent costly incidents and uphold your reputation.

Want to strengthen your payment testing infrastructure? Connect with Paragon’s team today to explore how our solutions and best practices can enhance your testing capabilities, protect your brand, and help deliver superior payment services to your customers.