The Royal Bank of Scotland (RBS) is considering suing software vendor CA Technologies after an update last week crashed its computer systems, according to a report in today’s Financial Times.
The bank has also decided to cancel its corporate hospitality at the famous Wimbledon tennis championships in London, as senior managers seek to get a grip on the serious reputational and IT problems over the last week, which blocked payments in and out of current accounts, crashed direct debit mortgage and wage payments, and saw customers locked out of their online accounts.
The catastrophic IT problems at RBS, which have now been fixed, excepting the Ulster Bank unit, left behind a huge backlog that means NatWest, Ulster Bank and RBS retail banking branches will be operating extended opening hours all week. The problems were caused by a system upgrade to the CA-7 software last Tuesday at RBS Group's Edinburgh operations centre, although it is not clear if the software itself was at fault or the way that RBS handled it. CA Technologies has declined to comment.
The fact that the bank decided to push ahead with a software upgrade mid-week, however, does go against the usual policy in these matters. Weekend upgrades are usually targeted in case of any problems. Mainframe upgrades are especially common over the weekend for this reason, but with so many software tweaks and upgrades now being commonplace, finding the time to do them does sometimes mean more dangerous mid-week operations are a necessity, with live systems being affected if anything goes wrong as RBS has found to its cost.
The picture is further complicated by the complex and sometimes antiquated IT systems that many retail banks have in the UK and other long developed markets, with some 1970s IBM Z series mainframes still in existence at some banks and many software systems and multiple legacy networks connecting into them.
RBS is facing a storm of criticism for the failure of its retail banking operation for a whole week, with Mervyn King, governor of the Bank of England, pledging that the Financial Services Authority (FSA) will carry out an investigation.
Andrew Tyrie, chairman of Parliament’s Treasury Select Committee, has also commented that it is “extraordinary” how long the problems have continued for and that he would consider holding hearings.
The UK Payments Council, representing all UK banks and building societies, has said its members will help out by agreeing to work with any customers affected by charges relating to RBS’ problems. According to Adrian Kamellard, chief executive of the Council, he is aware “this issue impacts other businesses and customers, not just those of RBS Group”.