IT glitch hits RBS for £125m

Saga should serve as a wake-up call to other end users, vendor warns

End users have been urged to learn a lesson from the recent system outage at RBS after the bank today revealed it has set aside a £125m to deal with the fall-out.

In late June, RBS suffered a technology glitch that affected its transaction batch processing, leaving customers without access to their accounts for up to two weeks.

The taxpayer-owned bank, which swung to a loss of £1.5bn for its fiscal first half, accrued a charge of £125m in Q2 in relation to the incident, which group chief executive Stephen Hester admitted had been a "blot on RBS' reputation".

This was mainly to cover redress to its customers.

"We are working through a detailed root cause investigation to assess what improvements need to be made to ensure these types of issues do not re-occur," Hester said.

"While we have significantly increased technology spend over the past three years, there is clearly more we need to do to ensure reliability for our customers."

Chris Papa, managing director of networking vendor Qubic, said the outage demonstrates that end users should have the right contingency plans and backup solution in place when performing a system upgrade.

"In the case of RBS, it really is hard to believe that such a damaging failure, with its huge implications for the business, could be allowed to happen and I am sure we will never get to the bottom of it," he said.

"What it has done, however, is serve as a wake-up call to those businesses across all sectors where downtime is not an option."