Royal Bank of Scotland has been fined 56 million pounds ($88 million) by Britain's financial regulators for a system crash in 2012 that left millions of customers unable to make or receive payments.
The 2012 outage, caused by a botched software upgrade, affected 6.5 million customers of RBS, NatWest and Ulster Bank in Britain for several weeks and raised questions about the resilience of the group's technology.
Some industry sources say RBS's systems are outdated and made up of a complex patchwork of systems after dozens of acquisitions.
The penalties imposed on Thursday comprised a 42 million pound fine from the Financial Conduct Authority (FCA) and a 14 million pound fine from the Prudential Regulation Authority (PRA).
The two regulators conducted a joint investigation into the matter and the fine from the PRA is the first it has imposed since its creation in April 2013. They concluded that RBS's systems and controls had been inadequate.
PRA Chief Executive Andrew Bailey said the incident "revealed a very poor legacy of IT resilience and inadequate management of IT risks".
"It is crucial that RBS, NatWest and Ulster Bank fix the underlying problems that have been identified to avoid threatening the safety and soundness of the banks," he said.
To prevent a recurrence of the problems, RBS has said it will invest an extra 750 million pounds by the end of 2015 to enhance the security and resilience of its IT systems.
"I am confident that the progress we have made ... has made RBS better able to provide the services our customers expect," said Chairman Philip Hampton.
The group suffered a further technology outage in December last year, which left more than 1 million customers unable to withdraw cash or pay for goods on one of the busiest shopping days of the year. Following that episode, Chief Executive Ross McEwan admitted RBS - which is 80 percent-owned by the British government - had neglected its technology for decades.
However, the FCA concluded that the 2012 incident was not the result of the bank's failure to invest sufficiently in its IT structure. It noted that RBS spends over 1 billion pounds annually to maintain its IT infrastructure.
The incident had already cost the bank 175 million pounds in compensation for customers and extra payments to staff after the bank opened branches for longer in response.
The bank said 6 million pounds was taken off its wage bill following the incident as a result of some staff forfeiting pay and bonuses, including bonuses waived by former RBS Chief Executive Stephen Hester and Ulster Bank CEO Jim Brown.
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