Barclays to pay millions as banks see month’s worth of IT outages

9 main banks and constructing societies working within the UK amassed at the very least 803 hours – the equal of 33 days – of tech outages prior to now two years, figures revealed by a gaggle of MPs present.

The Treasury Committee – which has been investigating the influence of banking IT failures – compelled Barclays, HSBC, Lloyds, Nationwide, Santander, NatWest, Danske Financial institution, Financial institution of Eire and Allied Irish Financial institution to offer the information.

It doesn’t embody the Barclays outage in January or the Lloyds outage last week – two incidents which occurred on payday for many individuals, and left prospects unable to pay their workers and payments.

The report finds Barclays might now face compensation funds of £12.5m.

“For households and people residing pay cheque to pay cheque, dropping entry to banking providers on payday generally is a terrifying expertise,” mentioned Dame Meg Hillier, the committee’s chair.

“The actual fact there was sufficient outages to fill a complete month inside the final two years exhibits prospects’ frustrations are utterly legitimate,” she added.

Talking on the BBC’s As we speak programme, she mentioned she hoped placing the information within the public area would encourage banks and the regulator to see if there was any extra that may very well be finished to cut back the disruption.

The Treasury mentioned it was “grateful to see the Committee’s findings”.

A spokesperson advised the BBC that the Treasury is “working with the monetary authorities to manage third social gathering suppliers, in addition to contemplating whether or not the banks are doing all they’ll to offer the extent of service prospects count on”.

However Patrick Burgess of BCS, the Chartered Institute for IT, says the findings “as soon as once more highlights that the standard banking sector hasn’t stored tempo with the funding wanted to modernise its infrastructure”.

The findings come as lots of of Santander prospects reported points affecting entry to the financial institution’s app and bodily banking providers on Thursday afternoon.

“We’re conscious that prospects are presently unable to entry a few of our providers,” the corporate has advised prospects visiting its web site’s service status dashboard.

“We’re very sorry for the inconvenience that is inflicting, and we’re working onerous to repair the issue as quickly as attainable.”

The Treasury Committee knowledge checked out IT failures which affected hundreds of thousands of shoppers between January 2023 and February this yr. They discovered there had been 158 incidents.

Whereas the information doesn’t embody the Barclays outage in January, which left one family without a home, the financial institution advised the committee that over half of on-line funds over the course of the primary day of the outage didn’t work as a result of “extreme degradation” of their system’s efficiency.

That household was Emily McAllister, from Melton Mowbray in Leicestershire, and her kids. Ms McAllister and her 19-year-old daughter Keira, who’s autistic and has Down’s syndrome, needed to spend two nights along with her sister and one evening at an area lodge after their home transfer was delayed because of the Barclays outage.

Talking after the committee launched its report, Emily advised BBC Information that she remained in discussions with Barclays over compensation.

She mentioned: “It ought to have felt like a recent begin and a brand new chapter, and it was utterly tainted, and can at all times really feel like that, however it’s beginning to really feel like residence.”

Barclays confirmed to the committee that it expects to pay between £5m and £7.5m in compensation to prospects for “inconvenience or misery”.

When making an allowance for all the knowledge shared by Barclays, this implies the financial institution might pay out as much as £12.5m in compensation as a result of outages over the past two years.

The second highest quantity paid out by a agency in that very same interval is £350,000 from the Financial institution of Eire.

The compensation paid out by different banks was:

• AIB (£590)
• HSBC (£232,697)
• Lloyds (£160,000)
• Nationwide (£77,452)
• NatWest (£348,000)
• Santander (£17,000)

Shilpa Doreswamy is a director with GFT, an organization dedicated to the digital transformation of the monetary sector.

“This can be a stark reminder of the associated fee, each monetary and private, of failing IT techniques,” she mentioned.

“For purchasers, this is not simply irritating, it may be devastating. When legacy banking infrastructure retains crashing, buyer belief crashes with it.”

In his submission to the committee, Vim Maru – the chief government of Barclays UK – mentioned the January outage was brought on by a software program drawback with their system, and the incident was not as a result of a cyber-attack “or every other malicious exercise”.

“We proceed to work by the influence to make sure no buyer or consumer will probably be out of pocket on account of the incident.”

Barclays advised BBC Information it was “deeply sorry to prospects who’ve been impacted by any service outage”.