Andrew Tyrie, chairman of the Treasury Committee, has promised it will examine whether challenger banks’ IT systems are sufficient to enable them to enter the market in the wake of fines imposed on the Royal Bank of Scotland and its subsidiaries for IT failures.
Yesterday (20 November) RBS, Natwest and Ulster Bank were hit with fines of £42m from the Financial Conduct Authority and £14m from the Prudential Regulation Authority over a major IT collapse two years ago that left customers without access to their accounts for several weeks.
Andrew Tyrie, chairman of the Treasury Committee, noted RBS and other banks’ promises that they were ‘investing heavily’ in systems on which customers will be able to rely, adding that “events will tell us whether they have done enough.”
In a statement RBS mentioned that it spends more than £1bn annually to maintain IT infrastructure, with chairman Philip Hampton noting that since 2012 the bank has increased the resilience of IT systems “through the additional investment of hundreds of millions of pounds and the enhancement of our control structures.”
Mr Tyrie said that it is a primary job of regulators not just take action on these failures, but to ensure that, across the banking system, IT systems are in place that can enable challenger banks to enter the market and offer a more reliable service.
“The Treasury Committee will be examining this question,” he said.