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IT Failure Fine of £56bn for RBS

IT Failure Fine of £56bn for RBS

RBS has been hit with a £56m fine following a software failure in 2012, just days after suffering a £400m penalty as a result of a 5 year rigging of foreign exchange markets.

In June 2012 customers of the bank were shut out of accounts held with NatWest, Ulster Bank and RBS due to a glitch in the IT systems. The problems continued for a number of weeks and affecting around 6.5 million people leaving them unable to access accurate balances, money abroad and online banking facilities. Additionally, those waiting for salaries and other payments from companies that used the banks also suffered the effects.

The bank described the events as “unacceptable” and £175m was set-aside at the time in order to recompense customers for losses. In addition to this, £1bn was committed to refurbishing the systems.

The most recent fines follow a number of penalties suffered by RBS including last week’s £2.6bn collective fine for the rigging of forex; £14.5m in connection with the sale of mortgage products; and also those issued for the Libor scandal. The fines for the IT glitch were administered by City regulators; the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The FCA dealt with the effects of the failure on customers, and the PRA with the impact on the financial system’s solidity.

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