Royal Bank of Scotland fined for IT failures
LONDON (AP) — British regulators fined Royal Bank of Scotland PLC 56 million pounds ($87 million) on Thursday for computer problems that made it impossible for customers to get access to their accounts.
The Financial Conduct Authority fined the state-owned bank for failing to put in place systems that could “withstand or minimize the risk of IT failures.” The Bank of England’s Prudential Regulatory Authority, also leveled a fine — its first since coming into existence in 2013.
The incident began on June 18, 2012, with some systems disrupted into July. Some 6.5 million customers were affected.
“It is crucial that RBS, Natwest and Ulster Bank fix the underlying problems that have been identified to avoid threatening the safety and soundness of the banks,” said Andrew Bailey, the CEO of the PRA. Natwest and Ulster Bank are part of RBS.
The fines are merely the latest drama for the scandal-ridden bank that was rescued by the taxpayer during the 2008 financial crisis. Regulators fined RBS and four other institutions $3.4 billion for manipulating foreign exchange markets earlier this month. It was also one of the banks sanctioned for alleged manipulation of LIBOR, an interest rate that affects trillions of dollars in contracts around the world, including mortgages and consumer loans.
Louise Cooper, a former Goldman Sachs stock broker who writes the financial blog CooperCity, said that there have been so many fines for past failures, they no longer seem exceptional.
“I am beginning to feel like Bill Murray, playing a weather man in the film Groundhog Day,” Cooper wrote. “I have written about bank fines so many times before. It is beginning to feel like a daily occurrence.”