LONDON (Reuters) – British regulators fined one of the country’s oldest lenders, Raphaels Bank, 1.89 million pounds after thousands of its customers were unable to use their payment cards on Christmas Eve in 2015.
The Bank of England and the Financial Conduct Authority said Raphaels had failed to properly supervise the companies to which it had outsourced large parts of its operations.
“There is no lower standard for outsourced systems and controls and firms are accountable for failures by outsourcing providers,” FCA enforcement director Mark Steward said.
More than 3,000 people – many of them seasonal workers who were paid via cards issued by Raphaels – were unable to make a total of 5,356 transactions, made worse because the problem came just before Christmas, regulators said.
The BoE said Raphaels received an increased fine because the bank had suffered problems before and its investigation showed underlying problems dated back to 2014. The fine was partly reduced because the bank promised to resolve the issues.
“Raphaels’ specific failings in relation to the incident resulted from deeper flaws in its overall management and oversight of outsourcing risk from Board level down,” the regulators said.
(Reporting by David Milliken; editing by Stephen Addison)