27 Jun 2012

RBS warned of IT outsourcing risk in 2010

An ex-employee of RBS warned 18 months ago that outsourcing the company’s computer systems to India would create “enormous risk” at the state-funded bank, Channel 4 News learns.

The employee, who has since left RBS and does not want to be named, has given Channel 4 News a damning picture of IT management and outsourcing at the bank, in the wake of computer problems which hit millions of UK account holders.

Since the financial crisis began, the bank has shed 36,000 jobs and in March 2012 announced 215 back-office jobs would go, with work being outsourced to India.

RBS said the recent problems were not connected to its Indian operations, and that the process of updating account balances which collapsed last week is based in Edinburgh.

Enormous risk

But in a letter to his MP written in December 2010, the former employee warned that outsourcing had a knock-on effect on the ability of the bank to deal with IT problems: “I write with regard to the recent decision at RBS to move over 500 IT jobs from the UK to India… This puts the RBS infrastructure at enormous risk of experiencing problems.

“In the current workforce large sections of knowledgeable and experienced people have already left due to the poor working conditions and a complete disregard to risk.

“This has left myself speaking to teams who tell me the last person who knew the system has left, these are not small systems – the RBS Group mortgage system is an example.”

Read more: RBS boss apologises over technical hitch

The ex-employee played a key role in overseeing changes to the bank’s computer servers, running “disaster recovery” exercises to make sure systems would survive a failure.


Speaking to Channel 4 News, the ex-employee said that outsourcing had left gaps in the company’s IT knowledge, and criticised efforts to recruit overseas.

“They told us we were being made redundant, and a lot of the most experienced guys left almost immediately,” he said.

“One of the managers was trying to get Indian guys in but when it came to the interview they didn’t know what they were doing. But the priority was to get bums on seats, and sort out the training later.”

RBS would not comment on any of the allegations. However, a spokesman said the bank would conduct a full investigation into last week’s problems, and was focused on fixing the problem and helping customers.