The Financial Services Authority (FSA) is preparing to tell UK banks to upgrade their outdated IT systems in light of the recent Royal Bank of Scotland (RBS) failure, which impacted customers for more than a month.
The city regulator is awaiting details of what went wrong at RBS before it issues its warning, according to the Financial Times.
“It wants to make sure firms see off these kinds of problems,” said a person familiar with the regulator’s plans. “It has seen the impact on customers.”
Millions of RBS customers couldn’t gain access to funds in their bank accounts after a botched upgrade that was made to batch processing software CA 7 from CA Technologies.
It was revealed that it was RBS’ Edinburgh-based IT staff that were responsible for the systems failure, which contradicted earlier media reports that claimed a junior IT worker based in India had made the error.
Some customers of Ulster Bank, a subsidiary of RBS’ in Ireland, were still experiencing problems over a month after the failure occurred.
RBS, which is 82 percent owned by the government, is also expected to receive a fine by the FSA, which would be the first such case due to an IT failure. According to the FT, industry watchers expect the penalty to be in the tens of millions of pounds.
The RBS outage has bought into question many of the UK and Europe’s IT banking systems, where analysts argue that they are operating on creaking mainframes that are hindered by poor governance. Read Computerworld UK’s analysis of the ongoing debacle here.
Computerworld UK contacted the FSA for a statement but it had not responded at the time of publication.