RBS still recruiting CA-7 staff in India despite offshoring being blamed for IT meltdown

RBS is still looking for staff in India to work on its CA-7 batch process scheduler

RBS is still seeking staff in India to work on its CA-7 batch process scheduler, despite a lack of knowledge in India being pinpointed as the reason for the IT meltdown that locked customers out of their bank accounts in June 2012.

When the CA-7 batch process scheduler froze in the summer of 2012, customers of RBS, NatWest and Ulster Bank could not access funds for a week or more as the banks manually updated account balances.

RBS was fined ₤56m by regulators for the failure. 

"The problems arose due to failures, at many levels in 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," according to the Financial Conduct Authority (FCA). 

The problem was traced back to human error at one of the company's India operations.

Former RBS tech head Mike Errington, who is now retired, was nicknamed Offshore Errington as a result of his propensity to offshore IT roles.

Multiple sources said the problems were caused by a lack of understanding in India of the upgrade process of the batch processing software. One source said it was upgraded without backup.

Despite the much-publicised problems in 2012 being put down to a lack of knowledge of legacy systems – and having made its ₤250-a-day Edinburgh-based CA-7 staff redundant  – RBS is still looking for low-cost offshore labour.  

It is currently recruiting in India for the roles, with RBS’s jobs site advertising roles in Gurgaon, India.

When announcing the RBS fine, the FCA said “the incident was not the result of the bank's failure to make sufficient investment in its IT infrastructure”. 

Yet, last year, RBS CEO Ross McEwan blamed the failure on years of underinvestment in IT for the problems. 

"For decades, RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on,” he said.

One senior banking IT source said the FCA is technically right for stating that underinvestment is not to blame – because “cost-cutting is to blame”.

“RBS has offshored the support of legacy systems to India where there is a lack of knowledge,” he said. "The large scale of offshore outsourcing of banking IT worries me a lot. I think outages will be the least of our worries. Security breaches will be the next big issue. The bad guys are smarter and better funded than the good guys....and they only need to win once to cause chaos."

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