Swedish financial regulator has applied an administrative penalty on Swedbank – a fine of approximately EUR 75 million. This penalty was applied for the lack of internal control mechanisms, which was the cause of many problems for this bank’s IT system.
The report published by the Swedish Financial Supervisory Authority published on Wednesday, the 15th of March, mentions that on the 28th and 29th of April in 2022 Swedbank experienced strong IT system disruptions during implementation of changes to the system. Because of this incident almost a million clients experienced incorrect listing of their remaining balance, as a large number of transactions were interrupted.
The investigation revealed that Swedbank added changes to its IT system without following internal procedures in regards to these changes. The bank also had no appropriate control mechanism to ensure internal procedures are complied with. This means the bank had violated rules in regards to internal control.
In accordance with the bank’s procedures, Swedbank was supposed to perform analysis of risks and effect from changes to the IT system. The bank was also supposed to perform the assessment based on multiple factors, including the time when wages are paid, the regulator explains.
«The bank did not follow its own procedures. This is why many people experienced serious problems when using the bank’s main services.
Nearly one million clients had incorrect account balance show; many could not perform payments.
This incident demonstrates that negligence of procedures and lack of internal control mechanisms can cause serious consequences,» explains acting director general of Swedish Financial Supervisory Authority Susanna Grufman.
The lack of an internal control mechanism could have affected the stability of the financial system, the regulator says, adding that this violation did not remain for a long time or was systemic. Swedbank has since enhanced its internal control mechanisms. This is why the bank was given a reprimand and an administrative penalty.
Swedish Swedbank owns banks in Latvia, Estonia and Lithuania through its subsidiary Swedbank Baltics.
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