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    Posted on Dec 2, 2013

    One Reason Why Natwest And RBS' Computer Systems Keep Failing

    Customers of the two banks have been unable to access their money. Blame the IT crowd.

    RBS and Natwest customers have been unable to withdraw cash, use their debit cards or pay their bills following yet another computer breakdown.

    Luke Macgregor / Reuters / Reuters

    RBS Group – which includes Royal Bank of Scotland, Natwest and Ulster Bank – suffered a computer failure on Monday evening. This left thousands of furious customers stranded at checkouts with Christmas shopping, unable to pay their restaurant bill, or without access to online banking for around three hours from around 7pm.

    The bank is now gaining a seriously bad reputation for computer failures. In summer 2012 a botched system update left some RBS customers locked out of their accounts for up to a fortnight, forcing the company to set aside £175m in compensation and earning it an official investigation by the British financial regulator.

    This was followed by a shorter system outage in March this year.

    This is the bank's somewhat vague acknowledgement of the problem. They have not clarified what caused the outage.

    We're aware of some technical issues and are working hard to fix them. Sorry and thanks for your patience

    NatWest Help

    @NatWest_Help

    We're aware of some technical issues and are working hard to fix them. Sorry and thanks for your patience

    / Via

    And here's some customers' more forthright takes.

    Thank you #RBS and #Natwest for making my daughter cry, unable to pay for her toys due to your usual system down problems.

    BOLATOSIN

    @ao2311

    Thank you #RBS and #Natwest for making my daughter cry, unable to pay for her toys due to your usual system down problems.

    / Via

    Awkward situation when I was declined in a petrol station due to natwest outage. #natwest #nwolb

    Ross

    @_Pugong_

    Awkward situation when I was declined in a petrol station due to natwest outage. #natwest #nwolb

    / Via

    Working in a supermarket when RBS and Natwest bank cards aren't working wasn't pretty

    Amy

    @amyoliviaa

    Working in a supermarket when RBS and Natwest bank cards aren't working wasn't pretty

    / Via

    But why does the RBS system keep failing? The blame lies with this man, according to journalist Iain Martin.

    David Moir/Files / Reuters

    Fred Goodwin led Royal Bank of Scotland through a rapid period of expansion during the 2000s, helping to turn it into one of the world's largest banks by buying rivals such as Natwest.

    But ultimately the dealmaking turned sour and the entire organisation had to be saved by the British taxpayer, who are still picking up the multi-billion pound tab.

    And the group's customers are having to deal with another remnant of that era.

    The guiding philosophy of the NatWest integration was that with a merged back room the bank could create and market financial products which could then be sold under the banner of the different brands in the group. So a NatWest customer would remain with the bank, but everything would be run on Royal Bank systems. This posed an enormous challenge for John White, head of IT.

    This integration explains why RBS problems affect customers across the group – they all run on the same system.

    The Register has previously explained how things are so bad that parts of the old RBS system "had been written in assembler for hardware going back to the 1970s". Essentially, even the modern computer code rests on top of some seriously old programming.

    Following last summer's outage RBS decided to spend an extra £450m replacing its creaking computer hardware. But this is not yet online and even then there are separate issues of outdated software.

    There were suggestions that parts of the NatWest computer setup might be superior to those in the Royal Bank. To maximise the cost-savings they pressed ahead with the original plan, Goodwin ordering that the systems for managing accounts of NatWest and its subsidiary Ulster Bank be bolted on to those of the Royal Bank in Edinburgh. This process was declared an unqualified success by Goodwin in November 2002 and the press was informed it had been completed ahead of schedule.

    None of this is much use if RBS has just ruined your night out or trip to the shops.

    Toby Melville / Reuters

    A lot of people who want to pay their bills are very unhappy right now.

    RBS' problem is that they have outdated computer systems but upgrading them is both very expensive and has to be done without outages occuring at any moment – banks can't ask their customers not to use their accounts for a week while improvements take place.

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