New UK financial regulator, the Financial Conduct Authority (FCA), is to probe an IT failure at Royal Bank of Scotland...
that also affected customers at NatWest and Ulster Bank in June and July 2012.
The glitch in the CA7 batch process scheduler ended with 12 million customer accounts being frozen, leaving them unable to access funds for at least a week while RBS, NatWest and the Ulster Bank manually updated all the account balances.
The IT problems lasted for several days, causing a backlog of transactions that had to be processed sequentially.
In a letter to Andrew Tyrie MP, chairman of the Treasury Select Committee, RBS CEO Stephen Hester attributed blame to "maintenance on systems, which are managed and operated by our team in Edinburgh, which caused an error in our batch scheduler."
The FCA, which took over regulating financial services companies in April from the Financial Services Authority, said it had begun an enforcement investigation into the breakdown.
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“The FCA will reach its conclusions in due course and will decide whether or not enforcement action should follow that investigation,” the FCA said in a statement.
The RBS banking group could face a fine or individuals could be censured and banned if the FCA finds systemic failures behind the technology failures, according to the Guardian.
RBS said the bank would be working closely with regulators in the UK and Republic of Ireland.
"Last summer's IT failure was unacceptable. We have already made significant improvements and, over the next three years, will invest hundreds of millions in our systems," RBS said.
RBS originally said the computer problems would cost the bank £125m, but the cost rose to £175m in November 2012, when the bank announced £50m more than initially expected would be paid to customers in compensation.