RBS's Ulster Bank whacked with enormous IT cock-up fine
Fallout from 2012 titsup tech disaster
RBS-owned Ulster Bank has been whacked with a €3.5m (£2.75m) fine for the IT outsourcing cock-up that affected RBS customers in 2012.
The incident resulted in around 600,000 customers being deprived of basic banking services over a 28 day-period during June and July 2012, said the Central Bank of Ireland (CBI).
The fine is the highest imposed by the CBI to date, with Ulster Bank having paid out a further €59m to affected customers.
Ulster Bank is reliant on RBS for the provision of IT services including IT risk oversight and management, having entered into an outsourcing services agreement with the RBS Group in 2005.
During June 2012, software that RBSG used to process banking transactions across all of its businesses, including Ulster Bank, failed.
El Reg broke the story in 2012 that the cock-up was due to a failure in a piece of batch scheduling software.
RBS has agreed to reimburse customers in England and Wales £175m for any loss suffered as a result of the incident in 2012.
The Financial Conduct Authority (FCA) has separately commenced a joint investigation with the UK Prudential Regulation Authority into RBS's technology failure. An outcome is expected soon.
RBS chief executive Ross McEwan said in a conference call last month the bank has nearly completed its commitment to make its IT "much more resilient".
Director of Enforcement at the CBI, Derville Rowland, said the major breakdown in the bank's IT was "completely unacceptable".
He said: "While the Central Bank recognises that IT outsourcing is a feature of modern banking business, outsourcing is no defence for regulatory failings." ®