A recent report by the Treasury Committee highlights major technical outages faced by nine leading UK banks over the past two years, impacting millions of customers. The findings raise serious concerns about the reliability of banking systems and the financial sector’s digital infrastructure.
Key Findings:
- 803 Hours of Outages Recorded: The nine banks reported 158 IT failures between January 2023 and February 2024 — equal to 33 full days of disruption.
- Barclays Faces Largest Compensation Payouts: Barclays could pay up to £12.5m in compensation due to tech outages, including £7.5m linked to a January incident.
- Impact on Customers: The outages caused severe disruptions, especially on paydays, leaving families and businesses unable to access funds or pay bills.
- Other Banks Compensation Payouts:
- Bank of Ireland: £350,000
- HSBC: £232,697
- NatWest: £348,000
- Lloyds: £160,000
- Nationwide: £77,452
- Santander: £17,000
- AIB: £590
Cause of Outages:
Barclays confirmed its January outage was caused by a software malfunction, not a cyber-attack or malicious activity. However, experts argue that the traditional banking sector is failing to invest in modern digital infrastructure to prevent such failures.
Customer Trust at Risk:
Experts warn that continuous technical failures damage customer trust in banking services. For vulnerable customers, losing access to their funds can lead to devastating personal and financial consequences.
The report urges banks to prioritize IT upgrades and regulators to impose stricter policies to minimize disruptions.
