RBS bosses blame Fred Goodwin for IT failure

Fred Goodwin was notorious for his cost-cutting. Picture: Ian Rutherford
Fred Goodwin was notorious for his cost-cutting. Picture: Ian Rutherford
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ROYAL Bank of Scotland bosses, under fire over a computer glitch which affected more than a million customers, have pointed the finger at disgraced former chief executive Fred Goodwin for a failure to invest in technology.

The bank issued an abject apology after a crash in its IT system left hundreds of thousands of people unable to access their money. The main crisis happened on Monday, the busiest day of the year for online shopping. But some customers complained they were still having problems yesterday, with incorrect balances and money disappearing from accounts.

Current RBS chief executive Ross McEwan admitted the bank had failed to invest properly in systems for decades, laying some of the blame at the door of “Fred the Shred”, his notorious cost-cutting predecessor.

Mr McEwan said the systems failure was “unacceptable”. He said: “Far too many of our customers were let down, unable to make purchases and withdraw cash.

“For decades, RBS failed to invest properly in its systems. We need to put our customers’ needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on.

“I’m sorry for the inconvenience we caused our customers. We know we have to do better. I will be outlining plans in the New Year for making RBS the bank that our customers and the UK need it to be. This will include an outline of where we intend to invest for the future.”

Mr Goodwin was chief executive of RBS from 2001 to 2009 and oversaw the bank’s rapid rise to global prominence as the world’s largest company before its near collapse in the 2008 banking crisis. He was later stripped of his knighthood.

The IT failure left some customers unable to pay after filling up with petrol or to settle restaurant bills while others were forced to abandon full shopping trolleys at the check-out. It was the latest in a string of computer meltdowns for RBS.

It came on so-called Cyber Monday, when retailers expected the highest number of online transactions to take place ahead of Christmas – and prompted a flurry of card users to take to Twitter to vent their anger.

RBS said today that services had returned to normal, apologised to customers, and said it would cover those left out of pocket.

In May, another glitch left RBS customers using mobile apps unable to access their accounts online.

It followed a major fiasco in June last year which saw payments go awry, wages appear to go missing and home purchases and holidays interrupted – and cost the group £175 million in compensation.

The then chief executive Stephen Hester announced that he would forgo his annual bonus in the light of the 

Mr McEwan, who took over earlier this year, admitted last month that the bank still receives far too many complaints “often on issues that would never arise if our systems and processes were more effective”.