The banking regulator is to conduct an investigation into banks’ computer systems following high-profile IT failures at Lloyds Banking Group and Royal Bank of Scotland (RBS).
The Financial Conduct Authority (FCA), the successor to the discredited Financial Services Authority, will on Monday announce the review of the systems at the major banks in the UK as part of its annual business plan presentation.
The investigation will examine the resilience of the IT systems at the main high street banks – just weeks after a glitch saw half the cash machines operated by Lloyds shut down for several hours.
RBS, meanwhile, has suffered three major outages over the course of the past two years, at least one of which has prevented customers from making or receiving payments. Speaking to Computing, insiders say that the problems at RBS stem from the bank’s many acquisitions since 2000 and a failure to consolidate disparate ageing systems.
“To access and manage our money we depend on the banks’ IT systems being reliable. But IT outages continue, interrupting key banking services. We want to make sure that the banks have resilient IT systems in place that are able to cope with consumer demand, so customers aren’t left financially stranded or disadvantaged,” Clive Adamson, director of supervision at the FCA, told Sky News.
The FCA’s investigation will be carried out alongside the Prudential Regulation Authority, which is part of the Bank of England, and will examine how banks and building societies manage their exposure to IT risks, according to Sky News.
It also carries with it the risk of swingeing fines for banks and building societies whose systems and IT management are found to be not good enough.
RBS is already subject to an investigation by the FCA following a major week-long crisis during the summer of 2012. RBS has increased its annual IT budget by £450m in response in a bid to address its manifest IT shortcomings.