NatWest crash caused by ‘in-house’ software glitch

Last week’s catastrophic IT failure at RBS, NatWest and Ulster Bank was caused by a failed software update to the banks’ in-house systems, according to reports.

The glitch forced NatWest, owned by RBS, to open 1200 branches through Sunday for the first time in its history, as it sought to deal with the backlog of customers who’s payments had not been processed.

Reuters reports that the glitch started after a software upgrade went wrong on Tuesday evening, meaning the banks were unable to process payments for personal and business customers.

An RBS spokesperson said this morning that the technical fault, to her knowledge, had taken place on RBS’ own systems, and not those of a supplier or outsourcer.

The spokesperson said she could not identify the software that had been upgraded on Tuesday, not would she confirm Reuters’ report. She said the glitch had been discovered on Tuesday evening and fixed on Friday.

Some reports had linked the outage to RBS’ use of IT outsourcing. This morning, BBC business correspondent Robert Peston wrote that, “As I understand it, one reason why RBS has not given much detailed information about why its services have been so badly disrupted is that so much of the operational responsibility for IT is outsourced – so there is a sensitive issue of where to attribute blame”.

The aftereffects of the IT outage are still being felt, with many customers still unable to log into their online banking. 

Susan Allen, RBS’ Director of Customer Services, warned on Sunday that the “knock on effects of this technical failure mean there will be bumps in the road. We will do everything we can to minimise further disruption to our customers”.

In a statement to customers on Saturday, RBS Group CEO Stephen Hester said that bank staff were working “around the clock” to resolve the payments backlog.

“I am very sorry for the difficulties people are experiencing,” Hester said. “Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. This should not have happened.”

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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