1. The RBS Group Computer
System Crash
Nur Amin HAJI NURAZMI
12907392
MSc in Applied Actuarial Science
University of Kent

2. The Cause
• The RBS Group uses an automated batch software called CA-7 which
controls the payment processing system.
• The problem began on the night of Tuesday, 19 th June when it updated
the software.
• It seems whoever made the update to CA-7 managed to delete or
corrupt the files which hold the schedule for the overnight jobs, so
they did not run, or ran incorrectly.
• The problems were spotted during the overnight run ahead of
Wednesday morning.
• However, the fix was only able to be done on Friday, 22 nd June.
• This resulted in three days' worth of unimplemented transactions
queuing up.
• This badly affected the main subsidiary companies of RBS Group -
RBS, NatWest and Ulster.

3. Negative Effects
• Payments and other transactions could not be made by the banks.
• Some customers could not access their accounts or even withdraw cash from
ATMs.
• Others faced fines for late payment of bills because the system could not
process direct debits.
• Banks were open until 7pm and even on a Sunday to assist customers.
• Till late July 2012, customers were still unable to access their accounts, with
on-going issues still not resolved by mid August 2012.
• Negative reputation.
• Loss of customers as customers moved their accounts to other banks.
• This issue has proved to be one of the largest IT failures the world has ever
known.

4. Effect on Share Price
Source: http://www.londonstockexchange.com

5. Risk Management Failures
• The Unite union accused RBS’ decision of cutting jobs in the UK
and offshoring them as the main cause. However, the RBS group
has denied that it made any difference.
• A manager for a company which provides automated testing
software to a number of banks - except the RBS Group - said,
“this was not inevitable – you can always avoid problems like this
if you test sufficiently."
• The British Government, like all others around the world, has yet to
introduce regulation which requires banks to report serious
failings in, or hacks of, their systems.
• The banking industry is resisting such compulsory reporting as this
may result in a negative effect on a company’s reputation.
• One solution would be to keep the failings by banks anonymous.

6. Sources
• www.gizmodo.co.uk
• www.telegraph.co.uk
• www.guardian.co.uk
• www.bbc.co.uk

7. Sources
• www.gizmodo.co.uk
• www.telegraph.co.uk
• www.guardian.co.uk
• www.bbc.co.uk