Royal Bank of Scotland cannot rule out suffering another meltdown in its computer systems despite pledging to spend £150m a year making them more resilient, one of the bank’s most senior executives said on Thursday.
With the bank still battling to put 600,000 payments into customer accounts that went missing on Wednesday, the bank’s chief administrative officer, Simon McNamara, said he could not make the system failsafe.
“I’d love to say we will never have a technical failing again. If you find somebody that tells you that I’ll tell you you’ve found a liar,” said McNamara. “It is not feasible to run 100% faultless systems”.
“Technology will on occasion fail. If and when that occurs, we need to ensure we can mask the impact on customers and recover as quickly and effectively as possible. It is important that it is handled well and competently,” he said.
He was speaking at a seminar about the bank’s IT strategy, which had already been scheduled before the breakdown on Wednesday that left 600,000 customers without payments due in their accounts from wages, tax credits and disability allowances. McNamara acknowledged the timing of the seminar was ironic given the ongoing IT problems.
The latest glitch followed an incident in 2012 when 6.5 million customers were locked out their accounts for days. The bank was later fined £56m for the problem with regulators saying it had failed to keep its computer systems up to date despite spending £1bn a year on technology.
McNamara said he and his team were disappointed about the current situation. He said it had been caused when RBS, which also owns the NatWest and Ulster brands, was unable to process a file of payments.
The underlying issue had been fixed, said McNamara, and lessons learnt from previous IT failures. However, the payments had not yet been put into customers’ accounts. “We are very close to applying payments to the accounts,” he said.
“We have a number of people who are working round the clock, using the skills and tools we have acquired to address this issue,” he said.
The bank has already admitted that the sums may not be put into accounts until Saturday.
He played down the significance of this week’s problem compared with the incident in 2012, which cost the then boss Stephen Hester his bonus. McNamara joined the bank in 2013 and had said that the problems from 2012 – which related to “batch processing” – would never be repeated.
McNamara has been overseeing spending of £750m over the three years to the end of this year on broader improvements to the bank’s IT. Computer systems are a troublesome area for many banks but particularly for RBS which has had a number of IT systems following its takeover of NatWest 15 years ago.
RBS is also trying to create new technology services for customers. McNamara – who was sporting an Apple Watch at the seminar – said the bank now had operations in Silicon Valley. Products for the Apple Watch could be launched next month.
The bank is also being forced to spin out 315 branches under the Williams & Glyn brand because of the penalties imposed by the EU at the time of its taxpayer bailout. After a series of delays, RBS must do this by September 2016.
McNamara is also responsible for overseeing the reduction of RBS’s sprawling office space, shutting down its offices on the Thames in London and in the east of the city in Aldgate.
The £150m annual spending is part of a £3.5bn three-year transformation programme for RBS, which includes refurbishing branches.
This article was written by Jill Treanor, for theguardian.com on Thursday 18th June 2015 16.57 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010