U.K. financial regulators are investigating an IT failure at British bank RBS (The Royal Bank of Scotland) that left millions of users without access to their accounts last summer. The problem, which stemmed from an error during a software update, has already cost RBS £175 million ($270 million) in interest waivers, reversed charges and compensation payments, InformationWeek reported. Additional penalties could be forthcoming based on the determination made by the Financial Conduct Authority (FCA), a new regulatory agency in charge of policing the U.K. financial services market.
The error last summer occurred when RBS, which owns British chains NatWest and Ulster Bank, performed an update to the CA-7 software that controls the bank’s batch processing systems. The program is used to automate large sequences of work involved in handling daily transactions from ATMs, bank-to-bank payments and elsewhere.
“It seems whoever made the update to CA-7 managed to delete or corrupt the files which hold the schedule for the overnight jobs, so they did not run, or ran incorrectly,” one programmer told the Guardian at the time. “They have backed out from this change, but now are trying to play catch-up, and have been doing so for a few days.”
Critics suggested that RBS could have engaged in more thorough source code analysis to test the system, and bank CEO Stephen Hester acknowledged in an interview with the Guardian that the company could have spent more on improving existing systems in addition to building new ones. The company has reportedly put aside as much as £80 million ($123 million) to improve its back-end systems and prevent further incidents, according to InformationWeek. However, another outage in March raised new questions and provoked a new round of customer outrage.
As banks look to avoid losses, satisfy customers and protect themselves against regulatory probes, ensuring software operates flawlessly is essential. With tools such as static analysis software, financial firms can strengthen systems and catch errors before they are released.
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