IT meltdown to cost RBS £125m

IT meltdown to cost RBS £125m

Summary: The banking group has had to set aside £125m following tech problems in June that saw computer systems unable to refresh customers' bank balances

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TOPICS: Security, Banking, Outage
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The Royal Bank of Scotland has put aside £125m ($195m) to cover costs and compensation following its June technology meltdown, according to the group's first half financial results.

The RBS IT problems affected NatWest, RBS, and Ulster Bank customers. A maintenance error caused a batch-processing glitch and as a result the bank could not update customers' balances, creating a huge backlog of work. RBS declined to say on Friday how many customers had been affected.

RBS
Computer problems at RBS in June will cost the banking group £125m, it has revealed. Image credit: RBS

"We fell down on the job in the IT incident," RBS chief executive Stephen Hester said on a conference call.

The £125m covered the reversal of charges, plus any additional costs, for example, if someone went overdrawn, an RBS spokeswoman told ZDNet on Friday.

"It's to pay back customers who were out of pocket," said the spokeswoman.

The IT incident is being investigated by the Financial Services Authority (FSA), and the regulator has asked for a report from RBS.

Topics: Security, Banking, Outage

Tom Espiner

About Tom Espiner

Tom is a technology reporter for ZDNet.com. He covers the security beat, writing about everything from hacking and cybercrime to threats and mitigation. He also focuses on open source and emerging technologies, all the while trying to cut through greenwash.

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  • Citizens Bank in the US too

    I experienced the inability to update balance in my US Citizens Bank
    account. (Citizens Bank in the northeast is owned by RBS, although
    not the Citizens Bank in Pennsylvania). After transferring money
    from 1 account to the other, the balances stayed as they were pre-
    transfer.

    Only logging out and logging in cleared the issue.
    However, later, it happened again, again requiring a logout and relogin.

    Btw, many years ago I got a debit memo from the same bank saying my
    balance with them was over -$1 million. Go figure.
    rosanlo
    • Citizens Bank in PA is part of RBS

      Only "The Citizens Bank" of Philly is not part of RBS.
      itguy10