Banks warned to improve IT systems

| September 4, 2012 | 0 Comments
Banks warned to improve IT systems

In the wake of the IT meltdown at the RBS group earlier this summer, the Treasury Select Committee is calling on banks to check their IT systems.

The error occurred on 19 June during routine maintenance of the RBS computer system.

It caused automated batch processing software to malfunction and although this was quickly fixed, the bank was left with a backlog of data to process.

Many RBS, NatWest and Ulster Bank customers found that their account balances had failed to update.

This meant some were unable to access funds, including wages, while payments failed to go through.

RBS and NatWest customers experienced difficulties for around two weeks, while the problems took even longer to be resolved at Ulster Bank.

Andrew Tyrie, chair of the Treasury Select Committee, has called on RBS to give “clear and straightforward” information to its customers on how they can seek compensation.

Letter between the committee, RBS and the Financial Services Authority (FSA) have now been published.

In one of the letters Mr Tyrie said: “Every bank should be checking its IT systems. We need to have confidence that such a failure cannot happen again.”

RBS has launched an investigation into the problems and will look at risk management, contingency planning and the impact of cost-saving measures.

A separate review will be carried out by the FSA.

RBS has set aside £125m to compensate customers for the problems they experienced as a result of the meltdown.

Last week, Ulster Bank revealed that all customers who visited the bank between 19 June and 18 July and made a transaction will receive £20 to compensate them for inconvenience caused.

It is also refunding charges placed on people’s accounts in error and will reimburse “reasonable out-of-pocket expenses” incurred by its customers as a result of the disruption.

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