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|5th September 2012, 06:46||#1|
Join Date: May 2010
Banks must review IT systems after RBS chaos
The UK banking sector has been told to review its IT infrastructure after the Treasury Committee chairman warned that the RBS computer glitch could have spread to other networks.
Treasury Committee chairman Andrew Tyrie MP said that "every bank should be checking its IT systems", in response to the IT glitch which caused widespread disruption for RBS, Ulster Bank, and Natwest in June.
"We need to have confidence that such a failure cannot happen again," Tyrie said, claiming that public confidence in the banking sector had been knocked as a result.
Millions were affected by the software patch upgrade that caused banking computer systems to fail, leading to widespread service disruption. RBS has earmarked £125 million for compensation. Last week, Ulster Bank, also affected by the computer failure, offered £20 compensation to its customers, each.
Tyrie warned that the problems threatened to infect other banks in the sector.
However, Tyrie also praised RBS chief exec Stephen Hester for his immediate response to the chaos caused by the software glitch.
"Mr Hester took swift action to remedy the failure; he also took full responsibility on behalf of RBS," Tyrie said. "He did the right thing."
Hester has previously claimed that IT outsourcing was not the cause of the software upgrade failure, following 30,000 job cuts and an increased reliance on shipping work elsewhere.
In letters published by the Treasury Committee today, Financial Services Authority chairman Lord Turner stated that an investigation would begin into the computer failure at RBS, as well as an internal investigation by the bank itself.
Lord Turner also warned that similar disruption to account access in future could cause a "potential drain on liquidity through customers removing their deposits".
According to reports by the Financial Times, the FSA has now written to the chairmen of major high street banks, requesting specific details of their attempts to ensure software glitches would not critically hit systems in the future.
The FSA has also requested the names of senior managers accountable for IT systems, and has requested that bank bosses identify any potential problem areas in infrastructure.
A spokesperson for HSBC confirmed to TechEye that it had plans in place to review its critical IT systems, and will respond to the FSA's requests.
Santander, Lloyds, and Barclays were unavailable for comment.
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