RBS bank boss admits lack of IT investment is behind Ulster Bank fiasco on Cyber Monday
Underinvestment in IT has prevented Ulster Bank customers from accessing their accounts three times in the past 18 months.
The astonishing admission came from Ross McEwan, the boss of its parent group Royal Bank of Scotland (RBS) in the wake of the latest computer crash on Cyber Monday, one of the busiest online shopping days of the year.
Mr McEwan also apologised for the "unacceptable" technical faults amid claims from City analysts that the problems would cost the State-owned bank as much as £1bn to rectify.
He said: "For decades RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on. We know we have to do better."
More than 200,000 Ulster Bank account holders were left high and dry four days ago when yet another computer glitch left them unable to access their cash.
The latest failure across the RBS network followed the catastrophic seize-up of June 2012 when an unprecedented crisis locked customers out of their accounts for up to four weeks.
After RBS bought NatWest in 2000 it was praised for making massive cost savings from combining the banks' IT systems, but financial journalist and political commentator Iain Martin has claimed that a lack of investment has come back to haunt the bank.
"The root of the problem lies back when RBS was in the middle of taking over a much larger English bank, NatWest," he said.
Mr Martin, who published a book on RBS – Making It Happen: Fred Goodwin, RBS And The Men Who Blew Up The British Economy – said the idea was that the main functions of the new group would be centralised.
"So RBS was the overall group brand, with RBS branches serving Scotland, and with NatWest still aiming at England, Ulster Bank the brand in Ulster, Citizens in the US, and so on," he said.
"But they would all operate off the same RBS IT platform, human resources and property set-up all run from Edinburgh, producing the vast savings."
Mr Martin said a "fateful decision was made on the IT front after the takeover deal was agreed" which involved "migrating NatWest's customers onto RBS's inferior and cheaper to run system to save more money".
"But the resulting system, as we can see now, was a pretty rickety one, especially when the RBS management grew complacent and regarded IT as something they didn't need to invest in."
Shoppers were unable to use their debit or credit cards to make payments for several hours on Cyber Monday, while phone apps and websites also failed. Customers could not pay for petrol and others abandoned food in supermarkets. A man complained he was unable to pay at a restaurant, leaving him embarrassed and having to promise to come back to pay.