Bank computer glitch gives an insight into contingency planning and the importance of cash flow

There have been some real difficulties handling transactions at RBS, with warnings that disruption to normal banking services may last for several weeks. This is a real headache – not just for RBS who stand to lose millions because of the problem, but for their customers who face a host of difficulties.

Here’s a good opportunity to think through what some of the issues might be.

It’s perhaps too early to be very clear on the source of the problems, although the links above give some clues.

A second question for more discussion would be what can RBS (and firms in a similar situation) do in these situations? Obviously they are best prevented, but what is their Plan B? This is often referred to as contingency planning.

The main question for you to consider is how might firms be affected by even a temporary inability to process payments electronically? Jot down some thoughts before watching this BBC video clip.