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.

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 courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited