RBS glitch: Bank ‘must face inquiry’ over IT meltdown

ROYAL Bank of Scotland should be subject to a “detailed investigation” over the IT meltdown which left customers without access to their cash, the governor of the Bank of England has said.

• Bank of England governor says FSA needs to investigate IT glitch

• RBS Group: all but 1 per cent of NatWest and RBS accounts updates

• ‘Small number of customers may still experience delays’

Sir Mervyn King said an inquiry should find out not only what went wrong, but why it took so long to sort out.

As the crisis continued into an eighth day yesterday, the banking group claimed it was getting on top of the problems and said it had successfully updated all but 1 per cent of NatWest and RBS account balances overnight.

However, it continued to attract criticism from customers who suggested otherwise, taking to social media networks to complain about how they were still waiting for their wages to enter their accounts or to make payments.

Speaking at a hearing of the Treasury select committee, Sir Mervyn told MPs the Bank of England had been in close contact with management at RBS since the problem arose.

He said: “Once the current difficulties are over, we need the Financial Services Authority (FSA) to carry out a detailed investigation to find out what went wrong – and, importantly, why it took so long to recover.”

Sir Mervyn said the problems at RBS were a reminder of how systemically important banks are, and confirmed the need to ring-fence retail operations from investment banking.

An FSA spokesman said the regulator expected a “full explanation” from the bank once it has sorted out customers’ problems.

While RBS and NatWest have around 15 million accounts between them, it remains unclear how many people were affected by the disruption, which may not be solved at another subsidiary, Ulster Bank, until the start of the next week. A spokesman for RBS said it may “never know” the exact figure.

In a statement yesterday, the group said a “small number” of customers may continue to be hit by the delays. It said: “RBS and NatWest confirm that the update of customer account balances has cleared overnight, with the exception of a few specific sets of transactions,” it said.

“We know this disruption was unacceptable, and that many customers will still have questions and concerns. It is possible a small number of customers may experience delays as we return to a completely normal service. We will continue to extend our branch opening hours all week.”

The bank has also taken out advertisements in national newspapers which state: “We’re working hard to put things right.”

A spokeswoman for the Financial Ombudsman Service said it would take time before customers see the issues corrected, and urged people to keep a record if they have found themselves out of pocket.

She said the large number of people affected was one reason for the process taking a while, adding: “They will have to look at each individual situation.”

The bank has extended its opening hours as staff work to sort out the problems, which began after a software upgrade on Tuesday last week..

Meanwhile, it emerged last night that RBS was given an industry award for its IT skills last week. It was recognised for “exceptional business innovation through technology” from the computer industry body, Scotland IS.

RBS said the technology in question had nothing to do with its software problems.