In the wake of the RBS IT systems failure which affected millions of customers, Sharlene Goff, Retail Banking Correspondent, analyses the internal issues that caused this and calls for a shakeup of the sector and its long neglected IT systems.
The article maintains that while recently there has been a large focus on the investment arm of the banks, and an emphasis on slashing spending on the bottom line, a new problem has unearthed in the form of layers and layers of complex IT systems. Since the 1970s, when major European and US banks built their initial IT systems, the landscape has evolved significantly, with the introduction of online and mobile banking being some examples of this. However the original IT foundations set up by the banks have stayed the same, and investment for maintaining this infrastructure have gone elsewhere.
Bradley Wood, partner at GreySpark, upholds that with the pressures on cost, the obvious area the banks will cut is IT, regardless of the fact that the banks have brittle systems which have been tied to modern systems without proper consideration or longer term investment.
He goes on to explain that it is perfectly possible for IT systems to be build that don’t fail, giving the example of air traffic control systems and life support machines. He states there is a risk vs. investment predicament and evidentially banks have been cutting corners.
The article looks at further examples of IT systems in other banks such as Santander, Nationwide Building Society and Deutsche Bank.