LONDON (Reuters) - The Financial Conduct Authority is investigating last year’s technology failures at state-backed Royal Bank of Scotland, the new regulator said on Tuesday.
The FCA, which this month took over the supervision of standards of financial firms, said it had started an enforcement investigation into the IT failures at RBS that affected millions of customers in June and July.
The FCA said it would reach its conclusions in due course and decide whether enforcement action should be taken.
RBS, 82 percent-owned by the government said it would work with regulators in Britain and Ireland to improve its services.
“Last summer’s IT failure was unacceptable. We have already made significant improvements and over the next three years will invest hundreds of millions in our systems,” the bank said.
The bank struggled last year to get on top of a huge backlog of failed payments after a software upgrade went wrong, resulting in it being unable to process payments for its NatWest, RBS and Ulster Bank customers.
The problems cost RBS 175 million pounds to rectify and Chief Executive Stephen Hester chose to waive his 2012 bonus to appease customers.
Fears about the resilience of RBS’s computer systems returned to the fore last month when it suffered another failure which left customers unable to process payments.
The FCA replaced the 11-year-old Financial Services Authority as the government ended a policy of “light-touch” regulation that failed to avert the 2007-9 financial crisis. The FSA had rarely disclosed any enforcement investigations before they were resolved.
Reporting by Matt Scuffham and Steve Slater; Editing by Greg Mahlich