The NatWest Ripple

Managing a number of NatWest group accounts for various businesses, it was plain to see the chaos caused by the bank's systems meltdown last week: Balances inaccessible, payments in and out held invisibly in the ether, online banking unavailable.

Thankfully, no significant financial problems were caused in my world, though Friday was the deadline for paying last month's PAYE to HMRC and a payment which I had pre-set for Thursday now shows as having left the account today. How many businesses will have been similarly caught up, I wonder, and how will HMRC handle a mass delay in payment? Erring on the safe side I telephoned HMRC this morning to make my apologies.

Overall, my clients have been fortunate, but the news reports talk of employers who couldn't pay their wage roll and of people exchanging on properties sitting outside their new homes with removals lorries, unable to obtain the keys because their completion payments weren't made.

Throughout the system, cashflow - frequently tightly managed - has been interrupted. NatWest may have restored their systems now, but what will be the knock-on economic and human costs?

Anna Figiel

John Paul

johnpaul-94865

The NatWest Ripple

It's good to see Natwest have regularised their website after the problems of last week. I often wonder why there's so much outsourcing, not only in banking but other industries too. Dyson outsourced manufacturing a few years ago but retained R&D here. Whether that's changed, I've no idea but I'm sure we can make the products in the UK without purchase increase - they're already high value items in any event and it would give opportunities here that would help lift the current situation. Maybe the same is so for other products and services too?

0 comments

Rory Woolridge

rory-woolridge-37212

The NatWest Ripple

At a particular networking event I attended, not Ecademy!, there was a particular table put by for a wunch... I later found out it had been reserved for the bankers! Perhaps more relevant for the recent past. Rory

0 comments

Mick Say

micksay

The NatWest Ripple

Hey Anna It beggars belief for sure, are we all a keystroke away from this happening with other banks systems? Should we spread our wonga over several banks?

3 comments

Steve Hall

stevehall3-99768

The NatWest Ripple

"Give a man a gun and he can rob a bank, give a man a bank and he can rob the world" .....what disgusts me more than anything is the COMPLETE lack of accountability. If I screw up with a client, I lose the contract and end up in a "discussion" on their outstanding invoices. If the bankers screw up, they walk away with millions in severance pay or whatever the word is nowadays!

0 comments

George Wallace

georgewallace1-619875

The NatWest Ripple

He is very good if you can get hold of him. Its the we are very sorry that I hate

0 comments

Simon West

simonwest

The NatWest Ripple

@George - your mistake was trying to meet him in the first place. Don't you know they are all virtual now - or re-training for a couple of jobs that have just come up in the IT Department :)

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George Wallace

georgewallace1-619875

The NatWest Ripple

The other major problem will be staff. People who are experienced in these systems have been laid off. New people often try to take short cuts and the system bites back have been there and got the tee shirt with someone taking a short cut. The fallout was amazing. The press had a field day. So the cuts by banks to save money may do in the short term but in the long term it can be very costly as RBS and Nat West are finding out to their cost.

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Georgina Lester

georginalester

Discussions about the IT infrastructure reminded me ....

.... of Steve Baker who was in IT, became involved in designing systems for banks and is now an MP. His take on how the system works endorses my view. I agree with Simon that it must be a challenge to get passed people who think that they understand the complexities of IT just because they can whizz around on their iPad or their own computer. There is a massive amount that goes on behind the scenes. However, I was somewhat worried when my instinctive feel for the way that the banking systems don't work was endorsed by Steve Bakers comments on his experiences. Fascinating stuff. I guess that there will be a new line in 'Secure Mattresses' launched very soon!

0 comments

Simon West

simonwest

The NatWest Ripple

Part of the problem here is the consumerisation and commoditisation of computing. This means that you, I and most other people feel very comfortable around computers. You & I use them every day and they just work - most of the time. But what this means is that we lose sight of the complexity behind our relatively simplified view of how computers work. And, as has been said above, things get far more complicated when computers are working in "real time" rather than "batch processing". So, why is this relevant to Natwest? My take on this situation is that Natwest, along with all the other banks, are running massively complex systems that have been developed since the 1960's and most of what is running our banking today is still related to those early systems running on big IBM and Amdahl mainframes. These legacy systems have been updated, patched, merged and updated with newer and newer versions and are now running tasks that they were never designed for. So when Natwest talks about a "simple upgrade", as William say above, that should have been the subject of months, if not years of testing, trials, dummy runs, etc. and it just takes one thing to go wrong amongst those 50 odd years of legacy code and the whole thing crashes and burns, with little ability to pull back and have another go, as everything has changed. I have huge sympathy for the technical staff at Natwest who will inevitably carry the can for the inability of their IT Director to secure the necessary funds from a sceptical board that simply don't understand the complexity of the systems that run their business. The fact that they can use their iPad, makes them an expert on technology :) I find it amazing that we don't get more of these sort of massive failures given the way that these systems have been built and changed over the years...

0 comments

Stella Holman "The Connector"

stellaholman_theconnector

The NatWest Ripple

Glad to say that BACS payments seem to be on the move now as I receive my awaited credits this morning. NatWest/RBS are shortly to be taken over by Santander, I wonder if this issue has anything to do with that?

1 comments

Georgina Lester

georginalester

The NatWest Ripple

I can't help feeling that we are in for a bumpy ride with any BIG organisation that uses any form of computer database systems. Why? because my recent experiences of dealing with a huge number of big companies, government organisations and institutions like the various tax departments, have left me completely flummoxed by their inefficiencies and bad communication. Departments not communicating with each other, records on file not being updated, bizarre errors where money is lost, no answers because there are no variables factored into the data finding mechanisms (as in the search function doesn't search to find what you need) and so on. Some of these things have been totally bonkers and considering the sophistication of computer technology that WE as small business owners use, I just can't get my head wrapped around how it is possible that organisations with potentially huge budgets for setting up these things, can still get it so completely wrong. I find William's explanation about how some of this stuff works fascinating and slightly worrying! I wonder what else we don't know about!

0 comments

John Paul

johnpaul-94865

The NatWest Ripple

...And here is the Natwest Ripple in an earlier, slightly more elemental format>

0 comments

Doug Holman

dougholman-78336

The NatWest Ripple - or could it turn into a tsunami?

Could this be one of the first signs of a big bank about to implode, an inevitable consequence (as Edward Tudor suggests) of businesses not recognising that failure to evolve is almost invariably terminal? George is also spot on. As any engineer can confirm, in every walk of life where errors have potentially disastrous consequences, there are comprehensive fail-safe systems in place. It seems inconceivable that NatWest would install a major software upgrade without a thorough beta test program and a facility to revert to the previous configuration if there were any glitches. All this is standard practice in civil aviation, the military, medicine and numerous other fields. Why not in banks? Either the NatWest Board were not listening to the Director responsible or perhaps there isn't a Director who knew the extent of the risk. Either way, as a state-owned institution, the chain of accountability should be disclosed - not to blame or pillory individuals but to ensure that changes are put in place to prevent any possible recurrence. The fact that this has happened ought to have all self-respecting "techies" who are NatWest customers scurrying to Simon West for advice on where to transfer their accounts! Although we're not allowed to mention names, a mutual friend who is currently facing eviction thanks to dubious practices of a certain bank may be excused for indulging in a bit of schadenfreude right now! Cheers, Doug

1 comments

George Wallace

georgewallace1-619875

The NatWest Ripple

Having worked on large software projects and know the language. It is not fixed yet the statement is total rubbish. The article on the BBC web site says that they loaded some software and it all went wrong. For any large system you should have the ability to revert back to the last state in case something goes wrong. If they can't do that it must be a pretty rubbish system. They are not giving out compensation for loss of earnings. Heard of an experience with my Business Bank Manager I phoned telephone banking and asked to speak to my Business Bank Manager and they told him that they could not contact him. He was sat next to me, and asked them what they were doing?

0 comments

Simon West

simonwest

The NatWest Ripple

@ Ted. You say "These old dinosaurs of companies need to succumb to Darwinian evolution". They did! But they were brought back from the dead :)

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Stella Holman "The Connector"

stellaholman_theconnector

The NatWest Ripple

Dear Anna I have been able to access my Internet Banking and since yesterday noticed that debit payments on items bought via my debit card are now being debited from my account. I hope that they will start the ball rolling with automated credits quite soon. My Bank the RBS - Stephen Hester RBS Group Chief Executive wrote - and also have produced FAQ on their site. The option is to go to the bank and queue for cash though I have some money to spend on food and hope and pray that they resolve the problem this week so I don't have to waste a day doing just that. These days there are not so many transactions in actual cash - it is all debit and credit cards, depends how many people are effected, are the banks going to be able to keep up with the demand of cash withdrawals? I empathise with the people you have mentioned who have major difficulties as a result of this matter.. Best wishes Stella

0 comments

Terence O'Mahony

terenceomahony3-473485

The NatWest Ripple

Dear Anna Why apologise to HMRC for failure of effectively NATIONALISED bank? Interesting to see what they do with the excess interest gained on the extra overnight lendings, while charging penalties/interest to customers. Terence

1 comments

Simon West

simonwest

The NatWest Ripple

A lot will rest on how Natwest clear up the mess this has caused. If they are generous and fast with compensation for those that lost out and really go the extra mile to put things right, then this could turn into a reasonable outcome for them. I noticed, for example, that they opened 2,000 branches yesterday (Sunday!). That, to me, is the sort of attitude that is going to minimise the negative impact of the system failure. Either way, we can all learn a lot from how they respond, how customers react and how we could deal with a similar issue in our own businesses.

0 comments

George Wallace

georgewallace1-619875

The NatWest Ripple

RBS are still struggling to get their system working. I refused to compromise my account, they told me just to get credit and it would be okay. Hence have been refused compensation. Its being blamed on a lack of software engineers. They sacked them all to save money and messed the system up. Never believe a word that they tell me so much of it is not factual. To be quite honest they are coming out with all these apologies and they couldn't give a ****. They kept on telling me that they were sorry and it will be fixed by 8am this morning. Its now moved to being fixed today. Tomorrow it will probably be Wednesday.

2 comments