RBS IT failures not attributed to offshoring, asserted CEO Hester
The Financial Services Authority (FSA) has announced a comprehensive investigation into the recent IT failure at the Royal Bank of Scotland (RBS), which has caused significant problems for the bank's customers. The IT failure was triggered by a failed update to RBS's batch processing software, CA-7, manufactured by US enterprise software giant CA Technologies.
The FSA's investigation aims to determine the root cause of the IT failure and the reasons for the prolonged recovery. The error that initially triggered the problem was made by an inexperienced employee who, during an attempt to rectify the failed upgrade, cleared the entire queue and erased all scheduling.
Unite, a union representing RBS employees, has expressed serious concerns about the IT failure. David Fleming, a Unite officer, stated that it is the dedicated workforce at Royal Bank of Scotland who are working around the clock to resolve the problems customers are facing. The union believes that staffing challenges, exacerbated by job losses and extensive outsourcing, may have contributed to the issues.
RBS management has faced criticism for their handling of the situation, with reports suggesting that they have slashed 30,000 staff, imposed a pay cut, and decimated the pensions of the dedicated staff working to resolve the IT issues.
According to the Financial Times, RBS is reportedly discussing whether to sue CA Technologies for the computer failure. Two people familiar with the matter have stated that there is a significant chance that RBS will take legal action against CA Technologies. However, the exact individual responsible for signing any potential legal proceedings against CA Technologies remains unclear.
Stephen Hester, CEO of RBS Group, has stated that there is no evidence linking the week-long IT outage at Natwest, RBS, and Ulster Bank to offshoring IT jobs. It is worth noting that CA-7 is operated from RBS's Edinburgh technology center, although it is possible for employees in its captive Indian offshore facilities to operate it.
The glitch in RBS's IT system affected customer accounts, as CA-7 is used to update customer accounts overnight. The Bank of England's governor, Mervyn King, has stated that the FSA will conduct a "very detailed investigation" into the RBS IT failure to find out what went wrong and why it took so long to recover.
As the investigation unfolds, customers and employees alike will be hoping for a swift resolution and assurances that such a failure will not occur again in the future.
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