RBS may be fined over IT failures
Last year’s computer glitch at Royal Bank of Scotland that left millions of customers unable to access their accounts could land the bank with a hefty fine.
In one of its first announcements as the UK’s new financial regulator, The Financial Conduct Authority said the bank’s “IT failures” in June and July last year were now subject to an “enforcement investigation”.
In a notice on its website last week, the regulator added: “The FCA will reach its conclusions in due course and will decide whether or not enforcement action should follow that investigation.”
Since the computer glitch, reportedly triggered by an awry software update, RBS has said that the failure affected only “part of our IT systems,” but is estimated to have the cost the state-owned bank £175m, aside from IT upgrade costs of £80m.
Speaking on the eve of the FCA’s announcement, RBS chief executive Stephen Hester added: “We have conducted rigorous and independent reviews of what went wrong, and… can now better recover data and can do so independent of each brand.”
His comments refer to the banking group’s techies implementing a fix for most RBS and NatWest customers within days of the issue being detected, while Ulster Bank customers had to wait two weeks more, partly due to the Irish bank relying on NatWest’s system.
In total, more than 6.5million customer accounts were impacted, although RBS now says that, alongside stronger testing and monitoring procedures, all affected customers have been “appropriately compensated.”