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The Royal Bank of Scotland has insisted that outsourcing and jobs cuts have had nothing to do with its computer crisis that dragged into a sixth successive day on Tuesday.
But criticisms of the cost-cutting strategy it embarked on in the years since its bailout by British authorities remained in the spotlight.
A technical glitch in the bank's network impacted transactions in the last few days, triggering widespread anger from customers.
Meanwhile, CA Technologies, which provided the software to RBS, said it is “offering all assistance possible to help RBS resolve their technical issues which are highly unique to their environment”. “We do not comment on customer confidential issues,” Ms Lisa Ward, Communications Director of CA Technologies, said.
Part of the team which was responsible for a technical update to CA-7 batch processing software — allegedly behind the bank’s crisis — were recruited in Hyderabad earlier this year, The Register reported, citing a former RBS employee, and pointing to a Web advert posted in February, advertising for a professional with 5-8 years experience and an annual salary of up to Rs 10 lakh. “An inexperienced operative made a major error while performing the relatively routine task of backing out of an update to a CA-7 tool,” the article said, quoting the source. It did not specify whether or not the individual was based in India.
Speaking to Sky News this week, RBS’s beleaguered CEO, Mr Steven Hester, insisted that there was “no evidence” that either job cuts or outsourcing was to blame, pointing to the fact that the main IT centre was in Edinburgh.
However, unions expressed their concerns about the impact the 30,000 job cuts were having on the firm’s performance. “Serious questions must be asked as to why constant job cuts are being made when there are clearly serious issue which need addressing by management,” said Mr David Fleming of the Unite union.
RBS said Tuesday that it has successfully updated the vast bulk of the balances on accounts of NatWest and RBS customers, but was yet to complete the work on the accounts of its Ulster Bank customers, which it said would be completed by the start of next week, nearly two weeks after the crisis began.
The bank now faces a thorough investigation, as the Governor of the Bank of England, Mr Mervyn King, called for a full investigation by the country’s Financial Services Authority.
(with inputs from K.V. Kurmanath in Hyderabad)
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