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ARTICLE · 03 DECEMBER 2014

Managing The Risk Of IT Failure

Nabarro LLP
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The dependence of modern businesses on IT systems and the far-reaching consequences of IT failure were illustrated with dramatic effect by the system crash suffered by RBS in 2012.

United KingdomMedia, Telecoms, IT, Entertainment
Lee Gluyas
Lee Gluyas
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Summary and implications

The dependence of modern businesses on IT systems and the far-reaching consequences of IT failure were illustrated with dramatic effect by the system crash suffered by RBS in 2012.

A malfunction in a technology upgrade led to a backlog of 100 million unprocessed payments across RBS, NatWest and Ulster Bank. This had a direct impact on customers who were unable to access their accounts and an indirect but nonetheless significant impact on many businesses and individuals who were not customers. It is believed that 10 per cent of the UK population was affected by the crash one way or another.

It has been reported that RBS paid compensation in the order of £70m to those affected. This was compounded last month by fines imposed by the Financial Conduct Authority and the Prudential Regulatory Authority totalling £56m.

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