The system meltdown that afflicted RBS in June is about to be remedied, with the bank allocating £80 million to overhaul its mainframe systems.
The development is likely to generate a plethora of assignments for PAYE umbrella techies specialising in the IT skills market over the next twelve months as the money starts to pour in.
RBS was bailed out to the tune of £45 billion during the financial cataclysm of 2008 and is now 81% owned by the Government. The new overhaul is expected to unify the bank’s numerous mainframe systems, which currently number as many as 15.
The multiple systems are believed to be the legacy of a failure to consolidate after previous acquisitions, dating as far back as 2000 when RBS bought NatWest. The £80 million spend is scheduled to be written off over the next few years and is expected to be mentioned by CEO Stephen Hester on 2nd November, when the bank’s results for Q3 are announced.
Mr Hester and his team apparently foresaw the dangers of unintegrated mainframes as early as 2009, when they took control of RBS, but no work was actioned, as it was not then regarded as a priority. Things changed, of course, when a simple software update led to a gigantic breakdown this summer, leaving 12 million customers unable to access their money.
The debacle, which cost the bank at least £125 million, appears to have deterred Santander from proceeding with a huge £1.65 billion deal to take over 316 of its branches.
For specialists in IT contracting, the new decision looks set to keep many of them gainfully occupied in the coming year.