Royal Bank of Scotland (RBS) will dedicate £80m of its billion-pound-plus IT budget to eliminate problems caused by its IT infrastructure being made up of mainframes patched together following multiple corporate acquisitions.
Over the next year, RBS will use the money on top of the hundreds of millions already spent on IT to improve the integration of mainframes.
A major outage in the summer meant customers of the bank and subsidiary NatWest had major issues with their accounts.
The glitch in the CA7 batch process scheduler ended with 12 million customer accounts being frozen, leaving them unable to access funds for at least a week while RBS, NatWest and the Ulster Bank manually updated all the account balances.
RBS said it will pay £125m in costs related to the problems that meant customers could not access any funds credited to their account. These problems were partly due to the lack of integration of different mainframes.
RBS has 15 different mainframes as a result of legacy IT and acquisitions which include NatWest and Dutch bank ABM Amro.
Recent reports also suggested that Banco Santander pulled out of a multimillion-pound deal to take over RBS branches and customers due to perceived IT integration problems.
Chris Skinner, chairman of the Financial Services Club, said the new money looks like it is being spent as a workaround for existing problems. "£80m is a tiny amount compared to a full systems upgrade, which would be a better thing for RBS to do," he said.
