The Financial Conduct Authority (FCA) has fined the Royal Bank of Scotland, NatWest and Ulster Bank £42 million for IT failures resulting in customers not being able to access banking services.
The June 2012 incident was caused by a software compatibility problem, with the banks being fined for their failure to put in place adequate systems and controls to identify and manage their exposure to IT risks.
Over 6.5 million UK customers were affected for several weeks. During that time customers could not access their accounts online or obtain accurate account balances from ATMs; some customers were unable to make timely mortgage payments and others were left without cash in foreign countries.
The banks also applied incorrect credit and debit interest to customers’ accounts and produced inaccurate bank statements, and some organisations were unable to meet payroll commitments or finalise audited accounts.
Tracey McDermott, director of enforcement and financial crime at the FCA says:
“Modern banking depends on effective, reliable and resilient IT systems. The banks’ failures meant millions of customers were unable to carry out the banking transactions which keep businesses and people’s everyday lives moving.
“The problems arose due to failures at many levels within the RBS Group to identify and manage the risks which can flow from disruptive IT incidents and the result was that RBS customers were left exposed to these risks. We expect all firms to focus on how they ensure that they can meet the requirements of their customers when looking at their IT strategies and policies.”
Today’s fine is the first time the FCA and the Prudential Regulation Authority (PRA) have taken joint enforcement action. The PRA has fined the Banks £14 million.
