By Willy Staley  Posted on Mon Jul 2, 2012

Royal Bank of Scotland’s IT Disaster Points to Perils of a Cashless Economy

 
Royal Bank of Scotlands IT Disaster Points to Perils of a Cashless Economy

Alex Liivet/flickr source

A popular Dilbert shirt that was sold in the 90′s read: To Err is Human. To Really Screw Up You Need a Computer. Like many things from the 90′s, we would prefer not to remember that t-shirt, even if it contains a powerful lesson. We give up a lot of autonomy the more we rely on technology to do things for us, and we become helpless when it inevitably fails us. Cheerleaders for the cashless economy take note: customers of the Royal Bank of Scotland and other banks in the United Kingdom have been without access to their account for several days now — some even for two weeks. The culprit: a computer glitch.

The Guardian reports that customers of Ulster Bank, which serves both Northern Ireland and the Republic of Ireland, have been without access to their account for two weeks as a result of an “IT meltdown” at Royal Bank of Scotland, which is the parent group that owns both Ulster Bank and NatWest. All three banks’ customers lost access to their money  on June 19 — two Tuesdays ago. RBS and NatWest’s issues have been resolved, but Ulster Bank has still yet to be fixed.

According to a statement, Edinburgh-based staff of RBS was doing routine systems maintenance, which led “the automated batch processing to fail,” which has since led to a “processing backlog” which must be cleared in order for service to return to normal.

According to the Guardian, Ulster Bank has “no idea when the problem will be fixed” — bad news for the 100,000 customers or so who can’t access their Euros or Pounds. The bank is keeping long hours at its branches, where customers can come in with “photographic identification, account details and payslips” should they wish to withdraw money. How delightfully old-fashioned.

The Daily Mail, meanwhile, reports that RBS’ catastrophic glitch could possibly be blamed on the bank’s aggressive outsourcing of IT jobs to India and elsewhere. “RBS has laid off thousands of technology workers’ jobs in the past four years. Many of these positions have been replaced with roles based in India or the Far East…[where] a typical IT expert…with more than five years’ experience would be typically paid just £9,000 a year.” A UK worker of the same skill level would be paid more than five times that. “In theory,” writes the Daily Mail, “there is nothing preventing a repeat at any of Britain’s biggest banks”

As we surround ourselves with more gadgets that do impressive thing with money, it’s important to remember that we are creating new dependencies. Today a bunch of geeks want to replace your wallet with your phone. But what happens when your local cell tower gets, I don’t know, struck by lightning? Or more realistically, when your phone runs out of batteries. Why are we so excited about replacing cash when it has been such a reliable store of value and means of exchange? We run the risk of crippling ourselves, of “really screwing up” with this new impulse to make computers do every last thing for us.

What do we get in exchange?

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  • http://www.facebook.com/sunk818 sunk818

    Having a cell tower blow up or your phone run out of batteries, does not mean the system does not work. That’s really not a good example as it is an isolated incident. What is scary is the level of incompetence banks reach when they want to save in the short-term, but sacrifice reliability and trust in the long-term. People are emotionally sensitive about having to their money. This should be a lesson to banks that they should not take trust and reliability lightly.