MPs have written to bosses at the UK’s biggest banks to shed light on the impact of IT failures on their businesses, after a Barclays outage caused chaos on payday last month.
The recent three-day outage at Barclays Bank has heightened concerns over the stability of the banking sector, and the Treasury Committee has written to bosses at nine banks and building societies requesting information about IT outages.
CEOs at Barclays, Santander, NatWest, Danske Bank UK, Nationwide Building Society, Allied Irish Bank, HSBC, Bank of Ireland and Lloyds Banking Group were asked for information on the scale and impact of IT failures over the past two years. They have until 26 February to respond.
Barclays suffered a three-day outage from 31 January to 2 February. This began on payday and clashed with the HMRC’s self-assessment deadline.
The committee asked Barclays 10 questions, while the other eight banks were asked the same four questions.
The questions for Barclays included what caused the latest outage and how it affected customers, as well as how the bank intends to prevent such a failure happening again.
Banks don’t like to talk about IT failures, and while Barclays was quick to rule out a cyber security issue, it would not give details about the cause.
The other eight bank bosses were asked to provide an overview of the number of instances and amount of time in total services have been unavailable to customers due to IT failure over the past two years, how many customers have been affected, the amount of compensation that has been paid to their customers, and a description of the reason for the failures. You can read the letters to the bank CEOs here.
“When a bank’s IT system goes down, it can be a real problem for our constituents, who were relying on accessing certain services so they can buy food or pay bills,” said Treasury Committee chair Meg Hillier MP. “For it to happen at a major bank such as Barclays at such a crucial time of year is either bad luck or bad planning. Either way, it’s important to learn what has happened and what will be done about it.”
She said the closure of high street branches in favour of online banking means bank crashes hit customers harder. “The rapidly declining number of high street bank branches makes the impact of IT outages even more painful; that’s why I’ve decided to write to some of our biggest banks and building societies,” said Hillier.
One source in the IT sector who has worked at Barclays in the past said: “It is quite a cautious firm, and it won’t want to say anything that could have ramifications later if they say something wrong. I am sure they’re going to have to report this to the regulators, and they might get called in front of government.
“The Barclays outage sounds like somebody has probably changed or tweaked something and that’s caused the problem, which has obviously affected multiple systems,” they added. “My guess would be it’s something shared which could be a software component, or it could be some infrastructure.”