CA Technologies, which supplied RBS with the software that caused the bank's IT outage in 2012, has paid it millions of pounds.
The confidential payment was revealed by Sky News. It is said to amount to millions of pounds and raises questions about the software.
According to the report the companies reached an agreement out of court after the substantial IT outage. The problem resulted when RBS attempted to upgrade its CA-7 batch processing software, supplied by CA Technologies.
CA Technologies would not comment. The report said that CA Technologies and RBS had signed a non-disclosure agreement.
RBS was fined a total of ₤56m by the Financial Conduct Authority and Prudential Regulation Authority last week, and has paid millions in compensation to customers for the IT outage in 2012. RBS said in its financial statement for the first six months of 2012 that it was making a “£125m provision for costs arising from the technology incident in June 2012".
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CA-7 batch process scheduler
In the summer of 2012 customers of RBS, NatWest and Ulster Bank were locked out of their accounts for days as a result of a glitch in the CA-7 batch process scheduler, freezing 12 million accounts. Customers could not access funds for a week or more as RBS, NatWest and the Ulster Bank manually updated account balances.
"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," said Tracey McDermott, director of enforcement and financial crime at the FCA.
"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."
The secrecy of the agreement between RBS and CA Technology means other customers and banks cannot learn from the episode.
Paul Hinton, commercial technology partner at law firm Kemp Little, said that these types of payments are common between suppliers and customers that have long-term relationships. “It is cheaper for them to settle out of court and it keeps their problems out of the public view," he said.
"But this is not good for transparency, because others can’t learn from the problem and it is more likely to happen again.”