NatWest IT failure 'must be investigated': Bank of England boss

Bank of England governor Mervyn King has called for the Financial Services Authority to carry out a detailed investigation into the massive NatWest outage.

The FSA had already asked parent company RBS for a report into the software failure, which stopped customers' bank balances being updated for days and delayed direct debits and standing orders. However, on Tuesday King appeared to be telling Parliament that a much closer look was needed.

"Once the current difficulties are over, then we will need the FSA to go in and carry out a very detailed investigation, to find out firstly what went wrong, and then perhaps even more importantly why it took so long to recover," King said. "Computer systems will always go wrong from time to time. The important things are… your backup systems and the time it takes to implement recovery."

"What it shows everyone is how important the basic functions of banking are and what can go wrong when the system of making payments from one person to another is interrupted," King added.

According to reports in the Guardian and elsewhere, the problem was caused by a botched update of CA Technologies' CA-7 software, which was being used by NatWest/RBS/Ulster Bank for batch processing.

The update apparently saw the corruption or deletion of the schedule used to sequence overnight 'jobs' — batches of transactions. Although the batch-processing system was running incorrectly for just three nights, it left an enormous backlog that the bank has taken much longer to work through.

The RBS Group said on Tuesday that all customer balances were now up to date, "with the exception of a few specific sets of transactions".