The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) apologized for the technical error on Monday. It was one of the biggest shopping events of the year, Cyber Monday, when its systems crashed. The technical error persisted between 18:30 and 21:30 GMT. It made millions of customers unable to make payments with their credit or debit cards at gas stations, supermarkets, and online.
On Monday evening, the British government-owned bank said on Twitter that it was aware of the technical errors. Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) issued an apology to its customers. The bank also promised to compensate customers who were “left out of pocket” due to the systems crash.
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RBS suffers once again
It’s the second time the Edinburgh-based bank has witnessed such embarrassing technical issues. In June 2012, millions of Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) customers suffered when its software upgrade went wrong. At the time, the bank spent $286 million to compensate customers and pay the staff who worked overtime. The bank is still 81% owned by the British government. The government had poured in $74 billion to rescue the bank during the financial crisis.
RBS has long been criticized for its outdated technology. The systems crash on Cyber Monday highlights weaknesses in Royal Bank of Scotland’s technology. The bank hasn’t upgraded its IT for more than a decade. Industry experts say the bank’s technology is a “complex patchwork” of systems that resulted after a series of acquisitions.
Union leaders blame cost cutting by RBS
Unite, the largest union in the U.K., blamed the massive cost cutting by RBS for the technical glitches, reports Angela Monaghan of The Guardian. Unite said offshoring of IT functions and 30,000 job cuts since 2008 have made the bank unable to serve its customers properly. Union leaders urged the bank to stop its redundancy program.
Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) shares were up 1.30% to $10.87 at 10:02 AM EST.