Cast your mind back two years, and if you’re with RBS, you may remember that some customers were hit by technical glitches that meant they were unable to withdraw money, among other things.
The problem was reportedly the fault of a software update which was corrupted (allegedly by RBS staff), and proceeded to cause issues with the bank’s payment processing system, meaning some couldn’t get cash out, or indeed access online banking. Bank statements and interest calculations also suffered from errors, and all these hitches affected some 6.5 million customers over a period of several weeks.
Well, RBS (along with NatWest and Ulster Bank) hasn’t got away with this scot-free, so to speak, because Sky News reports that it has now been fined £56 million over the banking debacle. A Financial Conduct Authority (FCA) fine made up the majority of that penalty, accounting for £42 million of it.
The FCA noted: “The FCA has taken this action against the banks for failing to put in place resilient IT systems which could withstand, or minimise the risk of, IT failures.”
“The actual cause of the IT incident was a software compatibility problem with the underlying cause being the banks’ failure to put in place adequate systems and controls to identify and manage their exposure to IT risks.”
The fine isn’t a huge one given the scope of the problem, and the fact that RBS had put aside some £175 million to pay out to customers who lost money due to any errors – it has forked out some £71 million of that fund to date. The bank has also promised it will be investing some £1 billion in improving its IT estate over the course of the next three years, so hopefully we won’t see a repeat of such a prolonged incident.
The majority taxpayer owned RBS hasn’t had a good time of things recently, as this penalty follows hot on the heels of a £400 million slap on the wrist for foreign exchange market rigging allegations.
Image Credit: Robbie