Banks suffering major IT shutdowns ‘every day’, Which? reveals

Banks and building societies are being hit by more than one IT or security failure that potentially stops customers making payments every day, a Which? Money investigation has found.

The consumer champion found there were 302 incidents that potentially prevented customers from making payments in the last nine months of 2018.

It said the findings were made by looking at websites and speaking to banks directly in some cases.

It argued the findings highlight the need for a single regulator to be given the statutory duty to protect access to cash and build a sustainable cash infrastructure for the UK, as a “vital back-up” while digital banking is vulnerable to failure.

Since April last year, the Financial Conduct Authority (FCA) has required banks to inform it of operational or security incident which prevents customers from using payment services.

Which? found the average number of significant breaches across each of the 30 banks and building societies in its analysis was one a month.

It said Barclays reported most major incidents (41), followed by Lloyds Bank (37), Halifax/Bank of Scotland (31), Natwest (26), RBS (21) and Ulster Bank (18).

TSB, whose botched introduction of a new IT system last year caused customers to lose access to online banking services, reported 16 incidents.

Barclays said even minor glitches that have a minimal impact on consumers are reported.

A Barclays spokesman said: “We take IT resilience extremely seriously and we welcome transparency for our customers which is why we report every incident to the regulator, even minor glitches that have minimal impact on customers.

“Our systems are designed to ensure continuity of service for customers in the event of an incident, with a range of channels available to customers including our branch network, telephone, online and mobile banking.”

Which? said it is concerned that more than 25 million people who consider access to cash a necessity risk being left vulnerable without a non-digital payment alternative as bank branches and cashpoints close.

Previous Which? research has found that ATMs vanished at a rate of 488 per month in the second half of last year, while more than 3,300 bank branches have closed since 2015.

Jenny Ross, Which? Money editor, said: “Our research shows that these major banking glitches, which can cause huge stress and inconvenience to those affected, are even more common than we feared.

“This highlights why it is so important that a regulator is given responsibility to protect cash as a backup when technology fails and to ensure no-one is left behind as digital payments become more common.”

Trade association UK Finance said firms “work round the clock” to minimise disruption when glitches do occur.

A UK Finance spokesman said: “The banking industry is committed to providing the best possible service, ensuring customers are able to access and manage their money.

“When incidents do occur, firms work around the clock to minimise disruption and get services back up and running as quickly as possible.

“Operational resilience is crucial in a modern financial system and is a key priority for the industry.

“UK Finance members continue to invest billions to ensure systems, human and digital, are robust and secure.”

The spokesman said the industry has made significant advances in recent years, with digital innovation transforming the way money is managed, providing 24/7 access to payment systems, enhanced network capabilities and extended access through its partnership with the Post Office, increasing the range of options through which customers can conduct their day-to-day banking.

He continued: “This greater choice and reach of service channels helps provide better back-up for customers if an incident temporarily disrupts service somewhere in the network.

“We will continue to work closely with regulators, government and industry to protect the UK’s financial system, institutions and customers.”

Here are the number of IT incidents over a nine-month period, according to Which? Money:
– Barclays, 41
– Lloyds Bank, 37
– Bank of Scotland/Halifax, 31
– Natwest, 26
– RBS, 21
– Ulster Bank, 18
– Santander, 16
– TSB, 16
– Cahoot, 15
– HSBC UK/First Direct, 13
– Tesco, 12
– Co-op, 7
– Chelsea, 6
– Smile, 6
– Yorkshire Building Society, 6
– Coventry Building Society, 5
– Metro Bank, 5
– Nationwide Building Society, 5
– First Trust Bank, 4
– M&S Bank, 4
– Danske Bank, 2
– Bank of Ireland (UK), 2
– B, 1
– Clysedale, 1
– Monzo, 1
– Yorkshire Bank, 1
– Starling Bank, 0
– Virgin, 0