RBS’s NatWest customers were left high and dry this week when technical failures meant they couldn’t use ATMs, telephone banking, online banking or make card payments. Many disgruntled customers only found out when their cards were refused at shops and petrol
stations across the country. The IT glitch meant systems were down for three hours. Nine months ago, RBS customers were in the same boat when a software upgrade wrought chaos leaving customers unable to move money or pay bills for days.
So why does it keep happening?
The problem is the bank – as it stands now – is a product of numerous acquisitions and as such, they are grappling with a veritable hotchpotch of systems. Many retail banks are in a similar position.
When an organisation is burdened with legacy systems, it becomes a very challenging environment when technical changes need to be made.
The real danger for RBS is that this is the third serious technical issue in the past eight months – there was the RBS/Ulster failure last summer, the mobile application security breach at the end of 2012 and the NatWest failure this week. RBS runs the
risk of customers starting to look at them as a service risk.
Last summer’s glitch cost RBS in the region of £125 million by way of customer compensation. You can be rest assured that shareholders, in addition to customers, are not going to be best pleased by this latest turn of events.