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An article relating to this blog post on Finextra:

RBS, NatWest and Ulster Bank customers hit by fresh IT meltdown

RBS, NatWest and Ulster Bank customers were left unable to withdraw cash from ATMs, make card payments or access Internet and phone banking for several hours last night, after another technical meltdo...


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RBS and NatWest failures why do they keep happening

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.

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Comments: (5)

A Finextra member
A Finextra member 08 March, 2013, 03:20Be the first to give this comment the thumbs up 0 likes

RBS has turned into a disaster of a bank, it is owned by an ailing government, posts huge financial losses each year and it has closed so much of its global markets business, there really isn't much left to operate.

If it can't even perform straight forward transactional banking services, it has absolutely no hope.

What is left of this bank should be shutdown, pulled apart and sold off.

As it stands, RBS is a liability to taxpayers and a hazard to commercial and retail banking.

Jonathan Rosenne
Jonathan Rosenne - QSM Programming Ltd. - Tel Aviv 08 March, 2013, 06:36Be the first to give this comment the thumbs up 0 likes

Their first priority should be to implement a stand-in system that will take over when the main system fails. This will alleviate the ATM and POS difficulties.

A Finextra member
A Finextra member 08 March, 2013, 12:47Be the first to give this comment the thumbs up 0 likes

They have the capability to implement a stand in service with their existing solution but have opted to choose not to - which is common in Debit Card Issuing - as there is a higher risk associated with processing in STiP.  Credit Card Issuers are more willing to provide STiP services in the event the Card or Account Management System is unavailable to provide an authorisation response.  I suppose in the Current/Checking account world there are multiple channels requiring support (branch teller, internet and mobile banking, ATM and POS) and a Front End system may not recieve all channels and therefore the balance logged by them may not be in line with the System of Record.

Jonathan Rosenne
Jonathan Rosenne - QSM Programming Ltd. - Tel Aviv 08 March, 2013, 13:45Be the first to give this comment the thumbs up 0 likes

I a normal situation I would not recommend STiP for debit cards, but with this kind of a situation things are different. Of course the STiP should have a suitable daily limit, enough for daily use but not more.

Amit Agrawal
Amit Agrawal - in transit - Singapore 14 March, 2013, 05:52Be the first to give this comment the thumbs up 0 likes

I think regulator in the country should ask the bank to pay high fines if customers/common man is not able to access bank's ATM after some pre-defined time span