The Royal Bank of Scotland IT team at the centre of the bank's computer crisis had seen its UK headcount halved and work exported to India in a cost-cutting drive, sources have claimed.
Concerns had been raised with RBS management for the last two years about the quality of the teams in India. And IT problems that led to as many as 17m customers of NatWest, Ulster Bank and RBS being frozen out of their accounts for days "could have been prevented if the management had listened to us," a source told computing news site The Register.
RBS chief executive Stephen Hester this week dismissed suggestions that cost-cutting lay behind the malfunction which has potentially cost RBS millions in compensation and overtime bills for about 7,000 staff drafted in to keep branches open over the weekend.
In a television interview outside RBS offices in Scotland, Hester was asked whether outsourcing was to blame, and replied: "I have no evidence of that. The IT centre is our main centre that we are standing outside here in Edinburgh, nothing to do with overseas."
However, the UK-based "batch scheduling team" which helps process money transfers overnight had been cut from 60 to 30 employees. The problems began last week when the bank's CA-7 batch processing software was updated. It is understood that an inexperienced operator made a wrong move on Tuesday night last week which wiped the day's data from the system, creating a backlog which took days to clear.
Batch scheduling is a pivotal part of the nightly data processing performed by CA-7. The team prepare and schedule data for input into CA-7, gathering it from RBS's systems.
One source said: "The batch team was about 60 guys ... they ran applications that chose the jobs that ran – maintaining the CA-7 schedule, not the CA-7 support ... There were no redundancies in the CA-7 team but the batch support were taken down to about 30."
Sources said that all IT teams in areas considered non-critical had been cut by 50 to 70%. When the batch scheduling team was cut, some jobs taken from the UK were made up with staff from a division of RBS called Technology Services India.
Not all staff at the Indian support teams were considered up to the job. Team managers were reportedly struggling to get enough qualified staff and were forced to take on people they had previously rejected.
As a result there seemed to be frequent issues with the work performed. "We experienced great frustration" said one source, "some teams were great, but many we found we couldn't trust or struggled with."
RBS responded by stating that its focus was on "fixing the problem and helping customers", adding: "The management and execution of batch processing is carried out in Edinburgh as has been the effort to recover and resolve this issue".
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