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Q&A with RBS: Why do your systems keep going down?

RBS sign

This morning RBS and Natwest opened more than 1,000 branches early to deal with the fallout of their IT glitch. We put questions to the banking group to see how they plan to stop this from happening again.

Q. Could the security of my account have been compromised due to this latest IT glitch?

RBS/Natwest answer: We take our customers’ security very seriously and we will never ask them to disclose security details or personal information. We urge our customers not to click on any links and attachments within suspicious emails and to report a suspicious email to us by emailing phishing@natwest.com or phishing@rbs.co.uk. Or if a customer thinks their accounts have been accessed online by someone other than themselves, they should contact us immediately by calling us or by contacting one of our branches. We also have more advice online on how to deal with Phishing.

Q. Can RBS clarify its position on what it’ll be reimbursing people for? Can people claim for loss of earnings if they haven’t been able to get to work as they have no access to their money? Can they claim phone charges back if they’ve been on the phone to RBS trying to sort out the issue?

A. No customer will be left out of pocket. We will pay back all fees and charges incurred and for out of pocket costs, we will look at each claim on a case-by-case basis. Customers should get in touch with our call centres or come into our branches, where our staff will be ready to help.

Q. Many customers have reported payments made into their account not being credited, or payments made from their account not being credited – what’s happened to their money/transactions?

A. We have heard from some customers who are still experiencing problems as our processes and systems get back to a fully normal service. If any customer is experiencing issues they should get in touch with our call centres or come into our branches, where our staff will be ready to help.

Q. Why does this keep happening to RBS?

A. 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. We are sorry for the inconvenience we caused our customers and we know we have to do better. We will be outlining plans in the New Year for making RBS the bank that our customers and the UK need it to be. This will include an outline of where we intend to invest for the future.

Q. Are you confident it won’t happen again?

A. As the IT incidents over the last year have shown, building and maintaining a top class infrastructure is fundamental. Our customers deserve banking services that work 100% of the time. We have already committed to spend an additional £450m on improving our systems, on top of our £2bn annual IT spend.

Q. What is RBS going to do to restore confidence in its banking systems? And what would RBS say to those customers who are now looking at other banking arrangements?

A. We understand the frustration of many of our customers. The service we have provided is not acceptable and we are working hard to put that right and to rebuild their trust. From the experience last summer we have made decisions to invest significantly in our technology and we are part way through a multi year programme to invest billions of pounds in the technology. We and other UK banks use legacy systems, we need to replace and improve those systems and that is what we are doing but we deeply regret the inconvenience that customers have had.

Q. Apparently then CEO Stephen Hester promised customers he would report fully to customers on the problems and what RBS were doing to avert the issue again when it happened in 2012. If this is correct, what happened to that report?

A. We remain fully committed to publishing the relevant findings of our independent review into summer 2012’s IT problems. However, the FCA (our regulator), announced on 9 April 2013, an enforcement investigation into the incident. We will therefore share the findings of our root cause analysis on completion of that enforcement process.

Were you affected by RBS or Natwest’s IT glitch? What problems did you experience? Were you happy with how they dealt with your problem?


“However, the FCA (our regulator), announced on 9 April 2013, an enforcement investigation into the incident. We will therefore share the findings of our root cause analysis on completion of that enforcement process.”

I read that as we won’t publish our findings just in case the FCAs doesn’t uncover some of what we know.

Has anyone pressurised the FCA into when they’ll be reporting on the 2012 failure? Will they be reporting on the the numerous other failures since then too ?

Personally I’m still expecting to the issue to be a communication problem between UK workers and those in their off-shoring centre. resulting in someone doing the wrong thing at the wrong time.

The RBS website says “We’re very sorry for our systems issues on 2nd December. Our services are now back on line and we’re working through the impacts today”. I wish they wouldn’t seek to minimise the seriousness of this latest major service failure by calling it a “systems issue”. For many it was a disaster bordering on a catastrophe, but for the bank it was just an “issue”. It had happened before, and it’ll probably happen again now, because the billions of pounds they intend to spend on replacing their “legacy systems” is a multi-year programme and it won’t all work properly until the final piece of the new technology is fully up and running in harmony with the rest. RBS are also trying to implicate other UK banks by saying they all have “legacy systems”: yes they do, but they don’t seem to collapse quite so spectacularly. RBS’s slogan is “Here for you” and Natwest is proud of its “Helpful banking”. Perhaps the ASA should be invited to pronounce on the honesty and truthfulness of these mottos. While people often have an alternative credit card in case a payment is declined, few people have an alterntive debit card with a different bank.

Rob Burke says:
4 December 2013

Does RBS now regret offshoring 750 IT jobs last year?

Is that 750 people lost in the UK and replaced with people overseas or an unknown number of people lost in the UK with 750 people overseas?

When the company I worked for offshored, we lost 300 uk people to be replaced with almost 1500 overseas people, and boy did the quality plummet, but you try getting a senior manager to acknowledge that.

At the time lets says 1 uk person was earning £40k, whilst overseas in location A they’d cost £4k. They are now worried that they’ll be replaced by workers in location B who only cost £400 a year. Yet the management still stays in the UK, funny that.

There is a solution: Explore the new fast bank account switching service. I left RBS in 2007 for Nationwide, who have been excellent, and as yet I’ve had no problems other than a couple of hours when their internet banking was down.

And for those leaving, remember to make sure the fine, fine fellows at RBS are stopped from soiling the term “royal”:

“For decades, RBS failed to invest properly in its systems” Sadly they’re not alone, many financial organisation operating in the city are using back office systems written in the 80s.

The reason why RBS’s systems went down are no mystery within the IT world. They thought it was a good idea to outsource the management of their IT infrastructure and systems as a cost cutting measure. “Shareholder value” and all that.

Amongst those who were made redundant were those with systems skills. For the uninitiated, systems people are people not only skilled in the vertical technologies used, but also have the knowledge acquired over time of how these vertical technologies work together in that unique environment to make a working system.

Of course good systems people resign and leave all the time without organisations grinding to a halt, but to willfully get rid of them all at once requires an act of sublime stupidity. So in that light perhaps my assessment is all wrong. After all, RBS has never done anything that stupid before have they?

“However, the FCA (our regulator), announced on 9 April 2013, an enforcement investigation into the incident.” Are will still waiting to hear from the FCA ?

Maybe as part of the banking licence, banks should be forced to report on failings like this within 2 months. Not 2 + years.

For the record says:
2 September 2014

It’s complete but will not be published to public