Royal Bank of Scotland fined £56m over IT meltdown

Royal Bank of Scotland is to pay fines totalling £56m following an IT meltdown in 2012 which locked millions of customers out of their accounts.

The group, which includes NatWest and Ulster Bank, has already paid more than £70m 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 £42m, said the IT failure affected 6.5 million customers.

The Bank of England’s Prudential Regulation Authority has issued a separate penalty of £14m 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.”

More in this Section

EOn to cut between 500 and 600 jobs in UKEOn to cut between 500 and 600 jobs in UK

How does the Pixel 4 compare to the iPhone 11 and Samsung Galaxy S10?How does the Pixel 4 compare to the iPhone 11 and Samsung Galaxy S10?

Transport and Brexit top worry listTransport and Brexit top worry list

Limerick waste-to-energy firm sues heat exchange system supplierLimerick waste-to-energy firm sues heat exchange system supplier


Lifestyle

I am dating a lovely guy. However, he seems really awkward about being naked in front of me.Sex File: Boyfriend keeps his T-shirt on during sex

To instantly power up your look, veer towards the hard shoulder.Bold shoulder: How to instantly power up your look

Plums are a wonderful autumn fruit, useful for all sorts of recipes both sweet and savoury. In Ireland we are blessed with wonderfully sweet plums.Currabinny Cooks: Juicy plums work for both sweet and savoury dishes

The rise of home skincare devices doesn't mean that salons and clinics no longer serve a purpose.The Skin Nerd: Don’t try this at home — new treatments in the salon

More From The Irish Examiner