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RBS still failing to meet standards

Some panicked as they found their credit card was refused at the petrol station.

Some fumed as they tried to pay restaurant bills and could not. Others abandoned the week's grocery shop because their card would not work at the till. Another day, another group of angry bank customers.

The IT system failure that left millions of RBS, NatWest and Ulster Bank customers unable to use their debit or credit cards on one of the year's busiest shopping days was cock-up, not conspiracy, but some customers were understandably furious. It was not only the embarrassment; it was not only the inconvenience; it was the fact it was yet another failure by RBS. The bank has not yet recovered the public trust it lost so spectacularly when it had to be bailed out by the taxpayer five years ago, and with one bad news story coming hot on the heels of another, it is anyone's guess if and when any sort of confidence will be restored.

Technical problems can never be entirely prevented, especially in organisations such as banks which transact their business almost entirely through complex IT systems. RBS, to its credit, was swift to apologise to customers caught up in Monday's problems and has offered to recompense anyone who can demonstrate they are out of pocket as a result, as indeed it should. It will cost the bank millions of pounds.

Yet this was not a one-off glitch. It is only seven months since the last IT problem hit RBS, resulting in customers with mobile apps being unable to access their accounts. That incident was in turn less than a year after the previous almighty muddle at the bank, when millions could not move money, people were not paid their wages and some were fined for late payment of bills. The fiasco cost the bank £175m and much of their customers' dwindling good will.

Now the bank's chief executive Ross McEwan has admitted that RBS has failed to invest properly in its systems for decades. There has been a suggestion that a key period of under-investment came during the reign of Fred Goodwin when money was spent instead on acquisitions. RBS has rightly streamlined its operations to rebalance the books since the credit crunch, but that must not hold back investment in the bank's IT systems. Mr McEwan insists the bank is investing heavily in IT, but customers will be annoyed that it has been allowed to reach the point where there have been several major IT failures.

RBS's reputational problems, of course, go further than computer glitches. This latest mess comes only two weeks after allegations the bank deliberately forced companies into default to seize their properties. A review by a Financial Conduct Authority-appointed investigator of RBS's small business lending will now take place, but the bank denies systematic fraud. Even after it has had to pay compensation for mis-selling PPI, even after years of criticism for failing to lend enough to small businesses, even after Libor rate-fixing, this is the most damaging allegation yet. All these stories create the impression of a bank that is still badly failing to meet the standards its customers have a right to expect.

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