RBS IT crash ‘not offshoring issue’, says CEO Hester

Stephen Hester, CEO of RBS Group has said there is "no evidence" that the week long IT outage at Natwest, RBS and Ulster Bank was caused by the banking group sending IT jobs offshore.

Hester’s claim came after union Unite expressed "serious concerns" about RBS’ IT failure. "Following some 30,000 job losses at the bank and extensive outsourcing of functions, the union has grave concerns that staffing challenges are exacerbating the problems facing the bank," Unite said in a statement.

"It is the workforce at Royal Bank of Scotland who are working around the clock to resolve the problems customers are facing," said Unite officer David Fleming. "Yet RBS management has slashed 30,000 staff, imposed a pay cut and decimated the pensions of those dedicated staff who are now working hard to resolve the problems."

The glitch was triggered by a failed update to RBS’s batch processing software, CA-7, which it uses to update customer accounts overnight. CA-7 is made be US enterprise software giant CA Technologies.

Yesterday, the Register reported that although the problem was initiated by a failed update, the actual damage was done when an inexperienced employee made an error in backing out of the failed upgrade. "When they did the back-out, a major error was made. An inexperienced person cleared the whole queue … they erased all the scheduling," a source told the website.

RBS insists that CA-7 is operated from its Edinburgh technology centre, although it is possible for employees in its captive Indian offshore facilities to operate it. "The software error occurred in Edinburgh, the team controlling the software are based in Edinburgh, and the recovery is being managed from Edinburgh," an RBS spokesperson said.

According to the Financial Times, RBS is discussing whether to sue CA Technologies for the computer failure. The FT cited "two people familiar with the matter" saying that there was a significant chance that RBS would take legal action.

The governor of the Bank of England, Mervyn King, told the parliamentary treasury committee that the FSA would have to conduct a "very detailed investigation to find out, first of all, what went wrong and then perhaps even more importantly why it took so long to recover."

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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