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Technology / Software

RBS IT glitch to cost £125m

Banking giant RBS has set aside £125m to deal with the prolonged outage it suffered in June following an IT glitch during a software upgrade.

The tech problems affected some customers for up to two weeks, leaving millions of users unable to make or receive payments. RBS blamed the incident on a failed software upgrade that affected its transaction batch processing, but added that an independent investigation is underway to establish the full cause.

At the time the back said it would waive charges incurred by its customers as a result of any missed payments and that it would ensure credit ratings were unaffected.

In its half-year financial results the company said it would incur costs of £125m to cover the compensation and any other payments connected to the IT failure.

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"In late June, a number of our customers were impacted by a technology incident affecting our transaction batch processing," the company said. "The immediate software issue was promptly identified and rectified. Despite this, significant manual intervention in a highly automated and complex batch processing environment was required. This resulted in a significant backlog of daily data and information processing."

"A charge of £125 million has been accrued in Q2 2012 in relation to the costs of this incident, principally covering redress to the Group’s customers. Additional costs may arise once all redress and business disruption items are clear and a further update will be given in Q3," the statement added.

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