U.K. Finance Regulator Investigating RBS Over Technology FailureBen Moshinsky and Lindsay Fortado
The U.K.’s consumer-finance regulator is probing technology failures at Royal Bank of Scotland Group Plc, which left some customers at the lender’s NatWest and Ulster Bank units unable to withdraw money.
The Financial Conduct Authority, which took over from the Financial Services Authority last week, started “an enforcement investigation into the IT failures at RBS which affected the bank’s customers in June and July 2012,” according to a statement on its website today.
Customers were “let down” after a systems failure, RBS Chief Executive Officer Stephen Hester said in June. The two banks extended opening hours at more than 1,000 branches in the U.K. and Ireland after the technical problems, which started on June 19.
The computer failure caused problems with cash withdrawals and money transfers for NatWest customers and a delay in processing payments for Ulster Bank customers.
“Last summer’s IT failure was unacceptable,” RBS said in an e-mail. “Our customers deserve service they can rely on 100 percent of the time and that’s what we want to provide.”
The FCA said it will “reach its conclusions in due course and will decide whether or not enforcement action should follow.”
“One of the big lessons from this is how important the basic functions of banking are,” Bank of England Governor Mervyn King told lawmakers in a U.K. parliamentary hearing in London after the computer glitch.
“A very detailed investigation” by regulators was needed to “find out, first of all, what went wrong and then perhaps even more importantly, why it took so long to recover,” King said.