The Royal Bank of Scotland (RBS) has agreed a £56m settlement with financial regulators for an IT system failure in June 2012 – £6m more than the £50m penalty analysts had expected.
The glitch, which began during a software upgrade to the bank's payment processing system, left over six million of its customers unable to access their accounts.
Wages, payments and other transactions would not go through, with some customers being unable to withdraw cash from ATMs or see their own bank account details. Others faced fines for late payment of bills because the system could not process direct debits.
Then-chief executive Stephen Hester apologised, but denied claims the problem was the result of IT services being outsourced to India.
"There was a software change which didn't go right and although that itself was put right quickly, there then was a big backlog of things that had to be reprocessed in sequence, which is why on Thursday and Friday customers experienced difficulty,” he said.
It was mostly retail clients affected by the system failure, and the bank, which owns NatWest and Ulster Bank among others, put aside £125m for possible compensation payments that could follow.
The fine being imposed on the bank is a combination of £42m demanded by the Financial Conduct Authority (FCA), and £14m by the Prudential Regulation Authority.
According to Tracey McDermott, director of enforcement and financial crime at the FCA, the problems arose due to “failures at many levels within the RBS Group to identify and manage the risks which can flow from disruptive IT incidents”.
“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,” she added.
The fine is on top of the £217m penalty the bank is already being made to pay the FCA for its role in the forex rigging scandal.
Philip Hampton, the bank's chairman, said:
Our IT failure in the summer of 2012 revealed unacceptable weaknesses in our systems and caused significant stress for many of our customers. As I did back then, I again want to apologise to all customers in the UK and Ireland that we let down two and a half years ago.I am confident that the progress we have made – in increasing the resilience of our IT systems through the additional investment of hundreds of millions of pounds and the enhancement of our control structures – has made RBS better able to provide the service our customers expect and deserve. I am also pleased that the regulator acknowledged the steps we took at the time to provide redress to anyone who had lost out as a result of our mistakes.