November 20, 2014

According to a recent Bloomberg news release, The Royal Bank of Scotland has been fined 56 million pounds ($88 million) by the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority for a 2012 IT failure that left 12 million accounts inaccessible for weeks.

The IT failure, which occurred after a software upgrade was made to the bank’s computer system, impacted about 6.5 million customers (10% of the U.K. population), leaving them unable to withdraw or transfer money.

In a ComputerWeekly article covering the story, the FCA explained, “On 17 June 2012, RBS’s IT department upgraded the software that processed updates to customers’ accounts overnight. When it noticed problems with the upgrade it decided to uninstall it without first testing the consequences of that action. The IT department did not realize, however, that the upgraded software was not compatible with the previous version.”

Complex computer systems like RBS’ often require changes to be made in order to fix small errors or implement new updates. These updates can spawn errors in functions of the system that were previously working properly. RBS likely did not have a thorough regression testing strategy in place, which would have helped the IT team identify potential issues when the changes were made.

Software plays an important role in many of today’s banking institutions and without proper development and testing strategies in place, they risk significant financial losses or a decrease in customer base like RBS experienced. 

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