FSA demands review of RBS software failure

The Financial Services Authority (FSA) has demanded details of how major banks plan to prevent a repeat of the Royal Bank of Scotland’s (RBS) software glitch in June 2012.

The glitch in the CA7 batch process scheduler meant 12 million people could not use their accounts for up to three weeks. RBS, NatWest and the Ulster Bank had to manually update all account balances.

RBS will pay £125m in costs related to computer problems.

The FSA informed the UK parliamentary treasury committee in a letter sent on July 13, which was published on the committee’s website this week.

In June, RBS CEO Stephen Hester wrote to the chairman of the UK parliamentary treasury committee, Andrew Tyrie MP, that the failure was related to system maintenance. 

"The maintenance of the systems is managed and operated by our team in Edinburgh, which caused an error in our batch scheduler," said Hester.

But FSA chairman Adair Turner told Tyrie that RBS’s investigation into the trouble had not revealed the exact cause. RBS said the problems stemmed from a patch upgrade.

“While the firm has put in place its own independent review, we have informed RBS that we will require a separate full review by an independent skilled person to establish what went wrong and why,” said Turner.

A spokesperson at the British Bankers' Association (BBA) said it will be discussing the issue with its members in relation to operational risk and its mitigation.