The Royal Bank of Scotland was fined £42 million (US$66 million) by the UK Financial Conduct Authority for IT failures related to a 2012 incident where a software issue left millions of customers unable to access accounts.
RBS and two of its subsidiary banks, National Westminster Bank and Ulster Bank, failed "to put in place resilient IT systems which could withstand, or minimize the risk of, IT failures," the Authority said.
The cause of the IT incident was a software compatibility problem, with the underlying cause the banks’ failure to put in place adequate systems and controls to identify and manage their exposure to IT risks, according to the FCA. The IT failure affected more than 6.5 million customers in the United Kingdom for several weeks.
According to the FCA, in June 2012 RBS upgraded the software that processed updates to customers’ accounts overnight. When it noticed problems with the upgrade it "decided to uninstall it without first testing the consequences of that action... [the bank] did not realize, however, that the upgraded software was not compatible with the previous version."
In 2012, RBS, 80 percent-owned by the government, set aside £125 million ($196 million) in compensation and costs because of the disruption, the BBC reported.
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio