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MPs criticise RBS and Barclays for on-line banking outages

(Reuters) – Royal Bank of Scotland (RBS.L) apologised for outages that hit its on-line and cellular banking companies on Friday, the most recent in a string of such failings at British banks which have drawn criticism from clients and members of parliament.

FILE PHOTO: Royal Bank of Scotland indicators are seen at a department of the financial institution, in London, Britain December 1, 2017. REUTERS/Peter Nicholls

RBS afterward Friday stated it had fastened the issues, which adopted comparable outages on Thursday that hit Barclays (BARC.L), the Co-operative Bank (42TE.L) and fintech agency Cashplus.

MPs on Britain’s Treasury Select Committee, in letters revealed on Friday, referred to as on Barclays and RBS to clarify what induced the issues and set out how they might compensate clients who suffered monetary losses because of this.

The outages come when Britain’s lenders have been driving clients in direction of such companies because the banks cull department networks to chop prices. Regulators and politicians are rising scrutiny over banks’ cyber resilience.

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“High street banks justify the closure of their branch networks on the basis that they are providing a seamless online and mobile phone banking service. These justifications carry little weight if their banking apps and websites cannot be relied upon,” Nicky Morgan, chair of the Treasury Committee, stated.

Morgan gave the banks till Friday Sept. 28 to reply to her questions concerning the outages.

Royal Bank of Scotland Chief Executive Ross McEwan advised LBC Radio that the outage could also be associated to common adjustments it had made to its expertise, such a change to its firewall, however the trigger was not clear but.

“The team are working flat out… We feel the pain for our customers every time this happens,” he stated.

The RBS outage on Friday additionally affected NatWest, RBS’s most extremely rated model amongst clients. The lender used Twitter to apologise to clients and stated phone banking and ATMs have been working as regular.

Many clients took to social media to complain concerning the outage.

“So how do you expect me to pay my bills today when I work 9-5,” Natalie Wilkinson stated in a tweet to NatWest, asking different customers to suggest a extra dependable financial institution.

The penalties for banks of on-line banking issues and the next scrutiny of these failings by politicians could be extreme.

Earlier this yr a significant outage at mid-sized lender TSB, owned by Spain’s Sabadell (SABE.MC), left 1000’s of shoppers unable to entry their cash or make very important funds for lengthy intervals.

TSB Chief Executive Paul Pester resigned this month, following heavy criticism by the Treasury Committee and the financial institution’s clients for his dealing with of the disaster.

British banks don’t have lengthy to strengthen their contingency plans for when on-line banking companies fail.

The Bank of England and the Financial Conduct Authority in July set a deadline of Oct. 5 for British lenders to clarify how they will keep away from damaging IT breakdowns and reply to the rising risk of cyber assaults.

Additional reporting by Shubham Kalia in Bengaluru; Editing by Kirsten Donovan and Keith Weir

Our Standards:The Thomson Reuters Trust Principles.

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