RBS faces investigation over IT glitch

The Financial Conduct Authority has launched an investigation into the IT failure at the Royal Bank of Scotland that left some customers unable to move money from their accounts last year.
Written by Nick Heath, Contributor

The Royal Bank of Scotland faces an investigation by a national regulator into an IT failure that left some customers unable to move money from their accounts last year.

The Financial Conduct Authority (FCA) today announced it has begun an investigation into the IT failures at RBS which affected the bank's customers in June and July 2012.

The IT failure affected some customers of NatWest, RBS and Ulster Bank last year.

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 backlog of work.

The FCA took over the supervision of conduct of financial firms from the Financial Services Authority (FSA) this month. The body has the power to levy a fine or order a third party review into an incident to determine factors such as whether compensation needs to be paid to affected parties.

Last year RBS put aside £125m ($195m) to cover costs and compensation following the outage.

In response to the announcement of the FCA investigation an RBS spokeswoman said in a statement: "Last summer's IT failure was unacceptable. We have already made significant improvements and over the next three years will invest hundreds of millions of pounds in our systems. We will be working closely with our regulators in the UK and the Republic of Ireland."


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