NatWest Markets Plc

The Financial Conduct Authority (FCA) imposed a fine on the Royal Bank of Scotland Plc, (RBS) National Westminster Bank Plc (NatWest) and Ulster Bank Ltd (Ulster Bank) (together the Banks) £42 million for IT failures which occurred in June 2012 and meant that the Banks' customers could not access banking services. The Banks breached Principle 3 of the FCA Principles for Business in that they failed to take reasonable care to organise and control their affairs responsibly and effectively, with adequate risk management systems. The Banks agreed to settle at an early stage of the Authority's investigation and therefore qualified for a 30% (Stage 1) discount under the FCA's executive settlement procedures. Were it not for this discount the FCA would have imposed a financial penalty of £60,000,000 on the Banks. The actual cause of the IT incident was a software compatibility problem with the underlying cause being the Banks' failure to put in place adequate systems and controls to identify and manage their exposure to IT risks. The IT failure affected over 6.5 million customers in the United Kingdom for several weeks. Over the course of that period customers could not use online banking facilities to access their accounts or obtain accurate account balances from ATMs; customers were unable to make timely mortgage payments; customers were left without cash in foreign countries; the Banks applied incorrect credit and debit interest to customers' accounts and produced inaccurate bank statements; and some organisations were unable to meet their payroll commitments or finalise their audited accounts.