By Susan Hall, commercial partner at law firm Cobbetts

The computer systems failure that left millions of RBS and NatWest customers without access to their bank accounts should force businesses and public sector organisations to consider their own vulnerability, according to a top IT lawyer.

Susan Hall, commercial partner at leading law firm Cobbetts, said the problems at the bank would encourage firms to look at potentially expensive insurance to hedge against risk, along with tightening up service-level agreements with their suppliers.

She said businesses which had outsourced their IT to third party providers should check their service level agreements, continuity and disaster recovery plans and limits on liability in their outsourcing contracts.

But the RBS/NatWest failure could also hit SME-sized software companies as businesses may in future prefer to deal with suppliers with the scale to deal with the fall-out from a major systems failure, even though smaller companies often offer a more flexible service.

Susan Hall said: “There are thousands of businesses, local authorities and other organisations across the UK with similar IT arrangements in place and this case should really be acting as a wake-up call to them to see what changes can be made to limit their exposure.

“Many will consider insurance to guard against cyber risk, although this can be extremely expensive. A simpler solution may be amending the service-level agreement with their supplier if this is possible. Anyone at the point of renegotiating their IT contract or switching supplier should certainly be looking to tighten up their contractual protection or even reconsidering the whole process in the light of these events.

“However, I fear smaller software firms may be the real victims because they lack the necessary scale to offer the perceived reassurance that businesses and other organisations will want in light of the RBS case.”

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