20 October 2017
Dan Barnes


Dan Barnes - Information Corporation

47Posts 87,208Views 8Comments
Future Finance

Future Finance

Finextra and Oracle have gathered together some of the industry's top thought leaders to discuss, debate and analyse the key trends and issues within transaction banking, regulations and retail banking. This group will focus on upcoming regulations, new service offerings and industry debate shaping the new financial services landscape with regular blog posts, video interviews, webcasts debates and surveys.

Regulators strike at the core of banking and Who hit RBS?

21 January 2014  |  2926 views  |  1

Speaking to the Northern Ireland Affairs Committee on 8 January 2014, Sam Woods, director of UK regulator the Prudential Regulation Authority (PRA) condemned technology at UK banks as “antiquated”.

He reported that the regulatory body had “discovered a number of deficiencies” at the firms and that as a consequence there was a “programme of remediation under way.”

The trigger for Woods’ investigation had been the technology failings at RBS Group at the end of 2013 and in 2012.

Addressing these failings, Ross McEwan, RBS chief executive, had said in a statement on 3 December 2013, “For decades, RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on.”

There has long been talk of banks replacing their old core banking platforms, but it has rarely come about. The risk involved has been cited as the reason for not making the leap.

The tired analogy has been of ‘changing an aeroplane’s engines in flight’, although it would now appear that the banks are ‘changing an aeroplane’s engines as it plummets toward the ground.’ Never has the risk of not taking a decision been clearer.

It will be interesting to hear what the PRA’s programme of remediation involves in due course. The PRA’s predecessor, the Financial Services Authority commissioned a very detailed report under a thing called a Section 166 power into what went wrong at RBS, however due to the commercial nature of information involved, this is unlikely to ever be made public.

RBS took a hit on its websites over the Christmas period, but the cost wasn't all the bank's or its customers. I have been told that, at about 1p per gigabyte per second, a bot net which has a total capability of 1 terabytes per second essentially costs £10 per second to use.

Paying for the recent RBS/Natwest outages would have cost £36,000 per hour. Who has the money to do that?

TagsRisk & regulationRetail banking

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 23 January, 2014, 09:53

Why blame banks alone? Tech vendors have their own role to play for banks to transform their legacy applications. 


Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Dan Barnes
Dan Barnes - Information Corporation - London | 06 February, 2014, 09:40

The decision to switch is for the banks. They have known about the need to move from branch accounting since the mid-1980s.

One can lead a bank to a scalable, server-based architecture, but one cannot make it switch.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Latest posts from Dan

Google search: What’s my credit score?

01 July 2014  |  2721 views  |  0 comments | recomends Recommends 0 TagsRisk & regulationInnovationGroupFuture Finance

Trade finance creates a 10 billion dollar risk

11 June 2014  |  2390 views  |  0 comments | recomends Recommends 0 TagsRisk & regulationWholesale bankingGroupFuture Finance News Analysis

Bad as gold

29 May 2014  |  2615 views  |  0 comments | recomends Recommends 1 TagsRisk & regulationWholesale bankingGroupFuture Finance News Analysis

Is Bitcoin mo' money or no money?

29 May 2014  |  2134 views  |  0 comments | recomends Recommends 1 TagsBlockchainRisk & regulationGroupFuture Finance

Dan's profile

job title Writer
location London
member since 2013
Summary profile See full profile »
Award-winning, freelance financial journalist. Specialist in many areas, including; sell-side execution services, buy-side trading, market infrastructure, emerging markets, regulation, wholesale banki...

Dan's expertise

Member since 2013
47 posts8 comments
What Dan reads
Dan's blog archive
2014 (22)2013 (25)

Who's commenting on Dan's posts