RBS looking at a £50m fine for IT cock-up

18 November 2014

rbs Remember when The Royal Bank of Scotland's IT systems went awry and no-one could get into their accounts? Well, that's coming back to bite them on the posterior as the bank is looking at a fine for £50 million.

The Financial Conduct Authority (FCA), who will be doling out the fine, haven't said how much they're going to slap RBS with, but it looks like it'll be tens-of-millions.

FCA need to make a show of RBS because their cock-up saw over 100 million transaction being delayed, with people going to buy their shopping and finding that their cards didn't work, to people's direct debits for rent not leaving their account. It was a grade-A mess.

Of course, it was customers of the RBS Group that were inconvenienced, with RBS customers being annoyed, as well as those with NatWest and Ulster Bank.

In addition to this, Bank of England Governor Mark Carney has warned all the banks and financial institutions that there's going to be need for radical reform after a number of scandals. Let us not forget, the banks are also being investigated for diddling foreign exchanges and a whole lot more.

Regarding the latter RBS have already coughed-up £400m to the FCA and the Commodity Futures Trading Commission (an American regulator).

They're not the only villains in all this: HSBC, UBS, Citi, JPMorgan Chase and Bank of America are also settling with regulators all over the place, totalling $4 billion in payments. As for RBS, this IT mess has already cost them £175m to resolve. The whole thing is a depressing mess, especially given that the taxpayer now part-owns the Royal Bank of Scotland.

Carney said: "The repeated nature of these fines demonstrates that financial penalties alone are not sufficient to address the issues raised. Fundamental change is needed to institutional culture, to compensation arrangements and to markets."

"The succession of scandals mean it is simply untenable now to argue that the problem is one of a few bad apples. The issue is with the barrels in which they are stored. Standards may need to be developed to put non-bonus or fixed pay at risk."

If you're thinking that we need further reforms, Carney says: "Some might feel that, having apparently reached the finish line, the race has been extended. Indeed there will be inevitable calls by some vested interests to turn back. Already we can hear some of the runners, particularly those at the back, making world-weary arguments that more reform will hurt jobs and growth, and even that financial crises are just something that happens every five to seven years."

"If that were true, we are due for another crisis about now. Does anyone find that acceptable?"

TOPICS:   Banking

4 comments

  • dvdj10
    Genuine question, where does all the banks fines actually go?
  • Fat H.
    Genuine question. Won't the customers just be paying the fine via increased fees and not the bank?
  • Fat H.
    I'm bloody sick of NatWest. Up until a few years ago my overdraft was fee free and the first £100 attracted no interest. Now I get a monthly £6 fee if I go more than about £10 into my overdraft and interest up the ass on any amount. NatWest, more like NaffWest!
  • Gas M.
    How to those customers that were impacted with the failure benefit from this fine? Also does the tax payer benefit from this? FCA/FSA just another name for wanker.

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment