Ulster Bank Systems are down part 2 *READ* First post

Hibernicis wrote: »

Assuming that their systems get back up and running, and the account balances are brought back into reasonable shape fairly soon, Ulster Bank's management will be preoccupied with the following over the coming months:

• Catching up on the remnants of the backlog
• Chasing down the additional credit given to customers in cash form during the outage, and trying to get this back
• Dealing with whatever fraud arose during the outage
• Conducting extensive systems and process/procedure reviews and implementing the recommendations
• Resolving account queries in respect of any "lost transactions" and "lost batch jobs" and this is going to be a minefield for them.
• Answering to a plethora of prudential, financial and regulatory audits, parliamentary enquiries, shareholder investigations etc all of which will detract from the day to day running of the bank
• Probably coping with a few less staff at a senior level (after the fall guys fall) and maybe some new brooms (inflicted by the BOE/CBI) whose vigorous sweeping generates even more work for the troops

In other words doing all sorts of things that have nothing to do with the day to day running of a bank. Therefore eye off the ball time. And that’s allowing for the two very substantial assumptions in my opening paragraph above (that their systems get back up and running, and the account balances are brought back into reasonable shape fairly soon)

If they don’t achieve this, (an it may well be too late already) then it’s a Disaster scenario. There are many many statistics about the failure rate of companies who experience a significant disaster. Many of these are pure bull. However one of the most widely accepted statements is this “A Company that experiences a computer outage lasting more than 10 days will never fully recover financially. 50 percent will be out of business within five years.” ("Disaster Recovery Planning: Managing Risk & Catastrophe in Information Systems" by John Toiga, 1989)

I do not believe that Ulster Bank will collapse and leave account holders without their money. If nothing else the Irish Deposit Guarantee Scheme combined with the fact that RBS is owned by the British Government should minimise the risk of people not getting their money back ultimately.

I do however believe that there are other serious risks, depending on which scenario unfolds: Take the scenario outlined above (the most optimistic) - the bank survives as is. Management will be severely distracted, and will also be endeavouring to placate shareholders (their bosses) by making up the cost of the disruption which is currently estimated to be between £100m and £200m across the RBS group. This will be a very very different bank to the one which we are used to.

A second possibility is that "the attempts to clear the backlog" as they euphemistically call it, are somewhat less successful and administrators are appointed to clean it up, or the outfit is broken up and sold/given to other banks to sort out - this could well result in accounts being "locked" for a period to allow a handover audit take place, resulting in a period when accessing funds could be difficult at the very least.

There are a number of variants of the second scenario, from protracted wind-up/down, to immediate hostile takeover. None of these offer any particular comfort to the average account holder.

So my thoughts, after almost two weeks? Is your money ultimately safe - Yes, you will get it all back some day. Are things going to get worse before they get better? Probably. What is the sensible thing to do - Move your deposit/savings NOW while you can, or at the very least 50% of it to another institution and then see how this plays out before making a final decision. That’s what I did.

This is a rewrite of an earlier post (in the previous thread) which unfortunately contravened various posting guidelines and earned me an infraction for "Pointless, non constructive hyperbole”. I genuinely hope that I have not breached any guidelines on this occasion. And for the record, I apologise to the Mods for breaching the guidelines.

Huggles wrote: »

My UB Mortgage wasn't taken from AIB this morning, despite being in funds. Wonder what will happen now...

Deleted User wrote: »

I am very much affected by this. 2 salaries missing, loans, mortgage and some direct debits unpaid etc. Living off my credit card now.
I am sure this will get resolved in time. I have worked for 10 years in banks IT. When it is fixed i reckon UB / RBS will make their systems iron clad and may well end up the safest place to bank. Well here's hoping anyway. Hopefully all the banks will learn a huge lesson.

Huggles wrote: »

My UB Mortgage wasn't taken from AIB this morning, despite being in funds. Wonder what will happen now...