The FCA and PRA have fined Royal Bank of Scotland £56m for an IT failure in 2012 that left customers unable to pay bills or access cash from their accounts.
In the first time the two regulators have taken joint enforcement action, the FCA has fined the bank £42m, and the PRA has fined it £14m.
The FCA says RBS failed to put in place resilient IT systems which could withstand, or minimise the risk of, failures.
In June and July 2012, a software upgrade saw 6.5 million RBS, NatWest and Ulster Bank customers face disruption to account services for two weeks. That year RBS made a provision of £175m in compensation for those affected.
FCA director of enforcement and financial crime Tracey McDermott says: “Modern banking depends on effective, reliable and resilient IT systems. The banks’ failures meant millions of customers were unable to carry out the banking transactions which keep businesses and people’s everyday lives moving.
“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 and the result was that RBS customers were left exposed to these risks.
”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.”
On 17 June 2012 RBS’ centralised IT function Technology Services upgraded the software that processed updates to customers’ accounts overnight.
When it noticed problems with the upgrade it decided to uninstall it without first testing the consequences. Technology Services did not realise, however, that the upgraded software was not compatible with the previous version, which caused the disruption.
The FCA found that RBS did not have adequate systems and controls to identify and manage its exposure to IT risks.
It found there were inadequate testing procedures for managing changes to software, and that the risks related to the design of the software system that ran updates to customers’ accounts were not identified.
Earlier this month, the Central Bank of Ireland fined Ulster Bank £2.8m over the failure.