A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Monday, June 25, 2012

RBS gives open-ended commitment on software debacle

"Can all claimants form an orderly queue please"
Just when we thought the Royal Bank of Scotland was getting its house in order, we get the bombshell that their computers are not on message and have failed to deliver. What was described as a glitch is turning into a nightmare of extreme proportions. Stephen Hester must wonder whether banking is worth his while.

The problem with modern banking is that it is all one hundred per cent computerised. We have no bank managers, just managers of bank branches (most of whom squirrel themselves away in back offices). When the computers fail, they seem to fail. Little Britain was exactly right to highlight "Computer says no!" because most employees of corporate business rely on them as much as a junkie does a regular fix. Without computers they seem bereft of common sense and an ability to move forwards. Now it appears that RBS is saying that customers won't be left out of pocket due to this error. But how can they give such an undertaking, they of the taxpayers' bailout fame? Here's an example of a potential claim. Ken Taylor is a businessman in Watford running a payroll business and he has 1,000 contractors still waiting to be paid. He told the BBC, "The reputational damage to my business will be immense". How immense? Will he be seeking compensation in thousands, or possibly millions? All kinds of claims will come into RBS for consideration. Have they the staff to cope? None of this augurs well. It has been suggested a few customers may up sticks and leave. What if they leave in droves? It will be a double whammy for the taxpayer if they do. Multiple claims on one hand and multiple account closures on the other. Could be disastrous.

A spokeswoman for RBS said "when we say no one will be out of pocket, we mean it." Well good, but it's not your money you're sloshing around. Now its been said that part of the problem is outsourcing the software services in a measure to cut costs. This may only have resulted in them cutting off their own noses. I wonder if RBS has some sort of insurance cover for this. If so, premiums are likely to be hefty next year (and the rest of us will be contributing!). May I suggest it's goodbye to bonuses until they get this debacle sorted out? Or am I being too naive for my own good?

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