A report by a group of MPs has revealed that nine major UK banks and building societies experienced at least 803 hours of technology outages over the past two years—equivalent to 33 full days of disrupted services. The Treasury Committee, which has been investigating the impact of banking IT failures, collected data from Barclays, HSBC, Lloyds, Nationwide, Santander, NatWest, Danske Bank, Bank of Ireland, and Allied Irish Bank. Notably, the figures do not include recent outages at Barclays in January 2024 or Lloyds last week, both of which occurred on payday, leaving many customers unable to access their funds.
Payday Outages Cause Major Disruptions
The outages have caused significant problems for customers, particularly during payday periods. For example, the Barclays outage in January left one family, the McAllisters, temporarily homeless during a house move. Emily McAllister, a mother from Leicestershire, and her autistic daughter had to stay with relatives and in a hotel for three nights due to the disruption. Barclays has since confirmed it expects to pay £12.5 million in compensation to affected customers for “inconvenience or distress.”
Dame Meg Hillier, chair of the Treasury Committee, emphasized the severity of the issue:
“For families living pay cheque to pay cheque, losing access to banking services on payday can be a terrifying experience. The fact there have been enough outages to fill a whole month in two years shows customers’ frustrations are completely valid.”
Compensation Payouts by Banks
The report highlights the compensation paid by banks over the past two years due to IT failures:
- Barclays: Up to £12.5 million
- Bank of Ireland: £350,000
- NatWest: £348,000
- HSBC: £232,697
- Lloyds: £160,000
- Nationwide: £77,452
- Santander: £17,000
- AIB: £590
Barclays attributed its January outage to a software problem, ruling out cyberattacks or malicious activity. The bank stated it is working to ensure no customer is left out of pocket.
Calls for Improved Infrastructure
The findings have sparked criticism of the banking sector’s outdated IT systems. Patrick Burgess of BCS, the Chartered Institute for IT, said:
“This once again highlights that the traditional banking sector hasn’t kept pace with the investment needed to modernize its infrastructure.”
Shilpa Doreswamy, a director at GFT, a company focused on digital transformation in finance, added:
“When legacy banking infrastructure keeps crashing, customer trust crashes with it. For customers, this isn’t just frustrating—it can be devastating.”
Santander Faces Fresh Outages
The report’s release coincided with new issues at Santander, where hundreds of customers reported problems accessing the bank’s app and physical services on Thursday afternoon. Santander apologized for the inconvenience and said it was working to resolve the issue as quickly as possible.
Government and Regulatory Response
The Treasury Committee hopes that publishing the data will push banks and regulators to take stronger action to reduce disruptions. A Treasury spokesperson said:
“We are working with financial authorities to regulate third-party suppliers and ensure banks are doing all they can to meet customer expectations.”
Dame Meg Hillier added that she hopes the report will encourage banks to invest more in modernizing their systems to prevent future outages.
Conclusion: A Wake-Up Call for Banks
The report underscores the urgent need for UK banks to upgrade their IT infrastructure to avoid further disruptions. With millions of customers affected and compensation payouts mounting, the banking sector must prioritize reliability and transparency to rebuild trust and ensure seamless services for all.
