RBS fined £56 million over IT meltdownComments Off on RBS fined £56 million over IT meltdown
The group, which includes NatWest and Ulster Bank, has already paid more than £70 million in redress to UK customers as a result of the crash, which it has blamed on “unacceptable weaknesses” in its systems.
The Financial Conduct Authority, which has fined RBS £42 million, said the IT failure affected 6.5 million customers.
The Bank of England’s Prudential Regulation Authority has issued a separate penalty of £14 million in relation to the bank’s inadequate systems.
Over the course of several weeks, some customers could not use online banking facilities or obtain accurate account balances from ATMs.
They were also unable to make mortgage payments on time and customers were left without cash in foreign countries. Among other problems, the banks applied incorrect credit and debit interest to customers’ accounts and produced inaccurate bank statements.
The issues in June 2012 stemmed from a botched upgrade to the software that processed updates to customers’ accounts overnight.
When it noticed problems with the upgrade the FCA said the bank’s central IT function decided to uninstall it without first testing the consequences of that action.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said there were “failures at many levels” to identify and manage the risks stemming from such an incident.
She added: “Modern banking depends on effective, reliable and resilient IT systems. The banks’ failures meant millions of customers were unable to carry out the banking transactions which keep businesses and people’s everyday lives moving.”