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Further Pain: RBS faces further fine for major IT glitch

Further Pain: RBS faces further fine for major IT glitch
Date of Publication: Tuesday, 18 November 2014 13:08

The Royal Bank of Scotland is to face further punishment for a major system crash in the summer of 2012 that left customers high and dry.

 

The bank’s systems failed in June 2012 following a software upgrade, affecting millions of bank accounts including subsidiary brands, NatWest and Ulster Bank.

 

The glitch caused a backlog of millions of transactions, which took weeks to resolve in full.

 

Senior regulators at the time described the quality of the bank’s IT systems as ‘chronic’.

 

The flaky systems were also cited as a reason why the bank was unable to offload 316 branches to Nationwide or Santander.

 

The bank now faces an additional sting in the tail worth up to £50 million, as the Financial Conduct Authority approaches a decision on the penalty.

 

Successive Penalties

The fine will follow a steep £400 million ($634 million) fine imposed by UK and US regulators last week for the bank’s role in the foreign exchange rigging scandal.

 

The regulators concluded that the bank’s internal controls had not done enough to prevent traders from attempting to manipulate currency markets.

 

RBS said it has launched an internal review into the scandal that could result in bonuses being withheld from managers and executives, including former chief executive Stephen Hester.

 

The inquiry is being led by Jon Pain, a former regulator at the Financial Services Authority, who joined the bank as its head of conduct and regulation in 2013.

 

Keith McDonald

Which4U Editor

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Tuesday, 18 November 2014 13:08
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