One of the UK’s largest banks, the Royal Bank of Scotland (as well as its subsidiaries within its banking group – NatWest, Coutts and Ulster Bank) has announced that due to an IT malfunction, about 600,000 payments failed to be properly processed and that the process of getting the payments into the right accounts may not be completed until the end of the week. According to the bank, among the payments affected are salaries, tax credits and disability living allowances.
In a statement, RBS commented on the issue by saying,
“We are aware of an issue which has resulted in a delay to payments and direct debits being applied to some customer accounts. We have fixed the underlying issue, we apologize for the inconvenience caused and we are working flat out to get these payments updated for our customers no later than Saturday. To any customers concerned about the implications of this issue, we advise them to come into a branch or get in touch with our call centers, where our staff will be ready to help. We will ensure no customers are left out of pocket as a result of this issue.”
The Royal Bank of Scotland (RBS) has unfortunately a history with IT failures. In 2012, the RBS group experienced a similar issue which eventually led to regulators fining the bank. With another serious breach, RBS can expect another fine to be eventually handed down but in the meantime, the bank must focus on the true issue which is as electronic banking and payment grows, the legacy infrastructure will increasingly struggle to keep up. This latest IT failure may prompt the bank to accelerate the deployment of new banking technologies and platforms.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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