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RBS fined £56m for large IT failures

The Royal Bank of Scotland (RBS), a banking organisation that includes NatWest Bank and Ulster Bank, has been fined £56m for a 2012 IT disaster that meant business couldn’t entrance online banking services.

The excellent comes on tip of the £125m bill to repair a RBS’s systems after a disaster, which affected millions of customers.

The Financial Conduct Authority (FCA) pronounced it released a excellent since a bank had unsuccessful to put in place “resilient IT systems that could withstand, or minimise a risk of, IT failures”.

It’s a second excellent to strike a organisation this month, with Ulster Bank recently on a receiving finish of a £2.75m chastisement from a Central Bank of Ireland for issues relating to a same IT outage.

The 2012 IT pile-up influenced some-more than 6.5 million business of RBS, NatWest and Ulster Bank, many of whom were left incompetent to use even simple services for a duration of several weeks.

The meltdown meant many business were incompetent to compensate their mortgages while some firms were prevented from profitable their staff.

“Modern banking depends on effective, arguable and volatile IT systems. The banks’ failures meant millions of business were incompetent to lift out a banking exchange that keep businesses and people’s bland lives moving,” pronounced Tracey McDermott, executive of coercion and financial crime during a FCA.

“The problems arose due to failures during many levels within a RBS Group to brand and conduct a risks that can upsurge from disruptive IT incidents and a outcome was that RBS business were left unprotected to these risks,” she continued.

“We pattern all firms to concentration on how they safeguard that they can accommodate a mandate of their business when looking during their IT strategies and policies,” McDermott added.

Following an investigation, a FCA found that RBS didn’t have adequate systems and controls to brand and conduct a bearing to IT risks.

According to a regulator, sold causes for regard enclosed “inadequate systems and controls to brand and conduct their bearing to IT risks” and that “risks associated to a pattern of a program complement that ran a updates to customers’ accounts were not identified”.

The FCA also settled that RBS’s “IT risk ardour and process was too singular since it should have had a most larger concentration on conceptualizing systems to withstand or minimise a outcome of a disruptive incident”.

The occurrence of Jun 2012 isn’t usually IT glitch to have befallen a bank in new years. Dec 2 2013 was “Cyber Monday”, a biggest online selling day in a run-up to Christmas

However, an IT problem meant that thousands of RBS business were incompetent to entrance their accounts as they attempted to buy presents, with many blank out on deals due to a glitch.

The excellent comprises a £42m chastisement from a FCA, and a serve £14m from a Prudential Regulation Authority (PRA). This is a initial time a dual bodies have taken corner coercion action.

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