Ulster Bank has paid a record fine to the Central Bank for a technology meltdown two years ago that left 600,000 customers unable to access their accounts.

The €3.5 million fine was the most the bank could have been hit with for the IT outage after it accepted it was at fault for the failure.

For almost a month customers at Ireland’s third-biggest bank were unable to carry out even the most basic transactions and access their cash because of a glitch in processing payments at its parent company, the Royal Bank of Scotland.

Ulster said it accepted that its governance arrangements and controls over outsourced IT arrangements were not sufficiently robust and this led to the prolonged failure.

“The inconvenience that was caused to our customers went to the heart of the trust they have in us as a bank and we are quite clear that they should never have to experience anything like this ever again,” Ulster’s chief executive Jim Brown said in a statement today.

The bank says it has upgraded its technology since the failure. The changes include a mirror bank that can process payments should glitches hit its main IT systems.

On top of the Central Bank fine, Ulster has paid out €59m in compensation to customers who were affected.
The Royal Bank of Scotland is facing a fine in the UK for the crash, which affected millions of its customers.

The Central Bank also warned other lenders that outsourcing IT systems is no defence for failings.

Under new powers given to the Central Bank it can now fine firms up to €10m.