UK watchdog will probe Ulster Bank's IT failure
BRITAIN'S Financial Services Authority (FSA) is to start an independent investigation into computer failures at Ulster Bank and its Royal Bank of Scotland parent.
Around 600,000 Ulster Bank customers on the island were affected when the bank's payments system crashed for more than a month in the summer.
Its sister banks, RBS and NatWest, lost the use of their electronic payments systems but only for days, impacting 17 million customers.
Now the FSA is to probe RBS, NatWest and Ulster Bank, which use the same IT system based in Scotland.
Asked if it was conducting an inquiry here, the Central Bank said it would be co-operating with the FSA probe and a separate one being carried out by the Irish Payments Services Organisation.
The UK probe will involve nine major banks and building societies being asked to name senior managers who could be held personally responsible if information technology systems go awry.
The review was revealed in correspondence between FSA chairman Adair Turner, RBS chief executive officer Stephen Hester and Treasury Committee chairman Andrew Tyrie, published yesterday by the British parliament.
"We have informed RBS that we will require a separate full review to be undertaken by an independent skilled person to establish what went wrong and why," Mr Turner wrote in a letter to Mr Tyrie on July 13.
"On receipt of the independent review, we will consider whether further regulatory action is required."
RBS, Britain's biggest taxpayer-owned lender, was hit by a computer failure at its consumer bank in June that left some of its customers unable to access their accounts for days.
The FSA probe is in addition to the bank's own plans for an independent review into the malfunction that will report later this year.
The FSA review will also seek to understand why it took longer to resolve the matter for customers of its Ulster Bank division, according to the letter.
Ulster Bank was accused of insulting its customers when it announced last Friday a "miserly" one-off payment of €25 to compensate them for a month-long crash in its payments system.
And the bank was accused of making the payout scheme unnecessarily complicated. The offer consists of:
• A €25 payout to personal current account holders forced to use branch banking more often than normal because the bank's electronic payments systems did not work for four weeks.
• Ulster Bank also vowed to waive certain fees, charges and surcharge interest for three months as it bids to rebuild its reputation among its disgruntled customers.
l It will also cover out-of-pocket expenses incurred during the technical chaos, topped up by 20pc extra. But this top-up is limited to a maximum of €120.