LONDON - Royal Bank of Scotland has neglected its technology for decades, the state-backed bank's boss admitted on Tuesday after a system crash left more than 1 million customers unable to withdraw cash or pay for goods.
The problem for three hours on Monday, one of the busiest online shopping days of the year, raised questions about the resilience of RBS's technology, which analysts and banking industry sources regard as outdated and made up of a complex patchwork of systems after dozens of acquisitions.
"For decades, RBS failed to invest properly in its systems," Ross McEwan, who became chief executive in October, said.
"Last night's systems failure was unacceptable ... I'm sorry for the inconvenience we caused our customers," he said, adding he would outline plans in the New Year to improve the bank and increase investment.
The latest crash could cost RBS millions of pounds in compensation and follows a more serious crash in its payments system last year that Britain's regulator is still investigating.
The regulator has been scrutinizing the resilience of all banks' technology to address concerns that outdated systems and a lack of investment could cause more crashes.
The technology glitch is another setback for the bank's efforts to recover from the financial crisis when it had to be rescued in a taxpayer-funded bailout. The government still owns 82 per cent of RBS.
RBS's cash machines did not work from 1830-2130 GMT on Monday and customers trying to pay for goods with debit cards at supermarkets and petrol stations, buy goods online or use online or mobile banking were also unable to complete transactions.
The bank said the problem had been fixed and it would compensate anyone who had been left out of pocket as a result.
About 250,000 people an hour would typically use RBS's cash machines on a Monday night, and tens of thousands more customers would have used the other affected parts at its RBS, NatWest and Ulster operations. RBS has 24 million customers in the UK.
Twitter lit up with customer complaints.
"RBS a joke of a bank. Card declined last night and almost 1,000 pounds vanished from balance this morning! What is going on?" tweeted David MacLeod from Edinburgh, echoing widely-felt frustration with the bank.
Some people tweeted on Tuesday they were still experiencing problems and accounts were showing incorrect balances.