Fianna Fáil Finance spokesperson Michael McGrath has called for more rigorous testing of banks’ IT “disaster recovery” plans to ensure that the type of problems encountered by Ulster Bank in 2012 and technology glitches at other banks do not recur. Ulster Bank was today fined €3.5m by the Central Bank for IT failures that affected 600,000 customers in the summer of 2012.
Deputy McGrath stated, “Banking is an increasingly automated and integrated process. Problems at one institution can have significant knock on effect across the system. It is essential that each institution has an adequate back up plan in the event of a system failure occurring. What was particularly frustrating in the case of Ulster Bank was that customers were reassured on a number of occasions that the problems at the bank would be resolved imminently. However, it took nearly several weeks for the issues to be fully resolved.
“The Central Bank did not cover itself in glory during this episode. It was slow to take action initially and its overall response was inadequate. While I welcome the fine that has been imposed on Ulster Bank, I would like reassurance that more rigorous external testing is now taking place of the recovery plans that banks have in place to deal with IT problems as they arise. The outsourcing of IT services seems to have been integral to Ulster’s problems. Where such an arrangement is entered into, we need to be certain the service provider has the capacity and expertise to minimise disruption and when a problem does occur for it to be dealt with speedily.”