MPs have launched a new inquiry into the “astonishing” number of IT failures in the financial services sector following a string of recent meltdowns at high-street banks.
The Treasury Select Committee will examine whether banks can prevent service disruptions and put things right when problems occur.
Over the past year, millions of customers at banks such as Barclays, HSBC, NatWest, RBS and TSB have been hit by IT failures, leaving them unable to access their accounts.
The committee will also investigate how consumers are affected by outages and whether regulators such as the Financial Conduct Authority and the Bank of England are properly equipped to hold firms to account.
Nicky Morgan MP, chair of the Treasury Committee, says: “The number of IT failures at banks and other financial institutions in recent years is astonishing.
“Millions of customers have been affected by the uncertainty and disruption caused by failures of banking IT systems. Measly apologies and hollow words from financial services institutions will not suffice when consumers aren’t able to access their own money and face delays in paying bills.”
The inquiry comes at a time when there are a record number of bank branch closures, leaving millions of people unable to access financial services.
Ms Morgan adds: “As bank branches close and customers are ushered towards online services, the availability of those services is vital.
“The committee has launched this inquiry to consider the causes and consequences of these failures, and will examine what industry and regulators are doing to promote operational resilience.”
Creaking banking technology
In April, 1.9 million TSB customers were locked out of its online service and banking app after an attempt to migrate customers to a new computer system was unsuccessful.
Barclays customers were also left unable to log in to their accounts after technical problems in September. Customers at RBS, NatWest and Ulster Bank have also had issues.
When outages occur, customers have been left unable to pay their bills, sometimes leading to late payment charges and penalties. In some cases, people have been left unable to complete important transactions, such as a buying a house or paying for a wedding.
In some cases these outages are happening because banks are migrating over data from their old legacy systems to a new platform.
Legacy systems at banks were originally set up for branch banking and are sometimes up to 40-years-old. Banks have also bolted on technology upgrades to existing systems making them more complex, so when data is transferred over problems can occur.
If you have been unable to access your account as a result of an outage, you can make a claim for compensation by contacting your bank.
Alternatively, if you are unhappy with your bank you may also want to consider switching.
Read our guide to protecting youself from banking meltdowns for more.