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Consumer Council welcomes FCA fine but says it is vital all financial institutions learn lessons
The Consumer Council has today welcomed the decision made by the UK Financial Regulators to fine RBS, Nat West and Ulster Bank £56 million for their computer failures in June 2012, which resulted in thousands of customers being unable to view their balances or know if direct debits had been paid.
Aodhan O'Donnell, interim chief executive of the Consumer Council said: "The widespread disruption caused by the IT glitch caused inconvenience and distress for many. Ulster Bank accounts were the last to be restored, meaning customers here had to wait an unacceptable length of time, with many unable to use their account for up to one month.
"Throughout the crisis, we expressed frustration with Ulster Bank's lack of communication and clarity, and are disappointed that it has taken over two years to get answers from the financial regulator. What started as a technical failure quickly escalated into a payments crisis and a communications disaster, with the lack of clear information compounding consumer anxiety and distress.
"The FCA must work with all banks to ensure that they have robust and secure IT systems, particularly in the wake of an evolving banking landscape, where bank branches are in decline and consumers are being pushed towards digital banking services. We would also like to see the fine being used to increase financial capabilityand tackle financial inclusion.
"Whilst we acknowledge the investment and action that Ulster Bank has made to prevent this incident from recurring and make their IT systems more resilient, we also need assurance that adequate steps have been taken to improve communications processes and to rebuild consumer confidence.
A number of IT glitches have since occurred at Ulster Bank and other financial institutions in recent years, but thankfully none on the same scale as the 2012 payments crisis. It is important is that lessons are learnt by all financial institutions from today's decision.
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