RBS Under Pressure over New IT Failure
Big Banks' Problem: Archaic legacy technology
Royal Bank of Scotland faces fresh regulatory scrutiny after a technology glitch caused the disappearance of thousands of customer payments only months after the bank was hit with a record fine for IT failures.
Some 600,000 customer payments and direct debits went missing recently after a systems failure that closely resembled the cause of its major IT meltdown in 2012.
The latest problems throw doubt on the ability of banks’ archaic technology systems to cope with the increasing number of customer transactions spurred by digital banking.
Regulators will undertake a review of RBS’s latest systems failure, which came to light, once the issue, which was affecting many customers, has been resolved, according to one person familiar with the situation. It is not yet clear whether enforcement action will be taken.
Regulators hit the bank with a record retail fine of £56m last November after more than 6m customers were affected by a similar issue with its overnight processing systems in 2012.
David McIlroy, a barrister at Forum Chambers, said: “It is scandalous that a government-owned institution has found itself in this mess again. It’s not like a small bank which has teething problems, it’s a major part of the UK’s banking infrastructure.”
The issue has affected customers across the lender’s RBS, NatWest, Coutts and Ulster Bank brands. Although all customer payments have yet to be completed, the bank has resolved the underlying technical glitch that caused the problem.
