UK regulator begins probe into RBS IT disaster

UK regulator begins probe into RBS IT disaster

New UK banking watchdog the Financial Conduct Authority (FCA) has begun an investigation into the IT meltdown which hit Royal Bank of Scotland customers last summer.

In late June a bungled software update at the bank saw a huge payments backlog develop, causing chaos for account holders at RBS and its subsidiaries NatWest and Ulster Bank.

Customers' balances failed to update, leaving many unable to carry out transactions and pushing some into the red. Some NatWest and RBS accounts were not fixed for 10 days while Ulster was still affected weeks after the incident hit, forcing the bank to put aside £125 million to compensate customers.

In a statement, the FCA confirms that it "has started to conduct an enforcement investigation into the IT failures at RBS which affected the bank's customers in June and July 2012. The FCA will reach its conclusions in due course and will decide whether or not enforcement action should follow that investigation."

Coming at a time of intense public anger with banks, the IT failures caused uproar, with politicians demanding action and RBS chief Stephen Hester forced into waiving his bonus from the 82% state-owned organisation.

Customers have also continued to see services affected by new, albeit less serious, technical glitches, with two separate events in just the last month hitting mobile, online and ATM services.

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