James Moore: Deutsche fine highlights the danger of poor IT systems
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Your support makes all the difference.Outlook And so the fines continue. Deutsche Bank is the latest to make a contribution to HM Treasury’s coffers. The Chancellor’s been giving the cash to military charities. No don’t laugh, we should have got past all those war jokes by now.
At least, for a change, it’s cock-up rather than conspiracy that has led to the penalty. And even though £4.7m is the second biggest fine levied for this sort of foul-up, we’re back in the realm of small change as far as City banks are concerned.
All the same, as cock-ups go this was a humdinger. Instead of reporting buy transactions involving contracts for difference the bank logged them as sells. And vice versa.
Deutsche could have held on to its coppers, and some of its dignity, had it took a warning from the watchdog a couple of years back sufficiently seriously. But (as is so often the case) it didn’t. The remedial actions it took failed to correct the problem, and so it’s got egg all over its face.
Yes it’s not only Royal Bank of Scotland (you won’t be at all surprised that it was fined over a similar issue) that has problems with its IT systems.
It used to be de rigueur when banks wanted to impress their shareholders with their cost cutting fervour to talk about axing support staff and IT people. It’s worth noting that just before the fine’s announcement, news emerged of a cyber attack on JP Morgan and a number of other US banks. These are happening with alarming regularity.
The FCA’s decision notices – and the equivalents issued by other regulators – are typically freely available. There’s nothing like reading through a few of them on the subject of banks’ IT systems to make a hacker happy.
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