Treasury committee demanding answers on IT outages

eskbanker

https://committees.parliament.uk/committee/158/treasury-committee/news/205186/bank-outages-committee-demands-answers-from-banks-and-building-societies-following-barclays-it-failure/

Questions to Barclays regarding their outage on and after 31 January:

1. Please can you outline the failure that occurred, what caused it and how it affected Barclays’ customers? In your description, please can you provide a timeline of events, and a description of the failure by channel (i.e. app, web, branch, ATM, cards, etc). Please can you also note when all system failures were rectified?

2. Please can you provide an outline of how you intend to prevent such a failure happening again?

3.Please can you provide an overview of how your Board responded to the outage?

4. Please can you provide an estimate of the number of customers affected by your most recent outage (including as a proportion of your total customers), including an estimate of the number of vulnerable customers affected?

5. Can you explain how Barclays will manage customer complaints following this incident, including whether you will be proactive in contacting customers who may have suffered, or whether you will entirely rely on complaints being reported to you?

6. Please can you provide your initial estimate of the amount of compensation Barclays expects to pay out, given the potential costs your customers faced, and your expected timeline on the provision of that compensation?

7. Please can you provide the Committee with how your customer services response times changed over the period of the failure and in the period directly after, and the resources you have put in place to meet customer queries over the period and in the period directly after?

8. Please can you provide the Committee with an overview of your expected increase in fraudulent transactions over this period, how you have mitigated the risk of such transactions, and how you are helping customers who may have suffered due to fraud over the period?

We will also be writing to other banks for the following information about the state of IT systems supporting banking services in the UK, and would welcome Barclays responses:

9. Please can you provide the Committee with an overview of the number of instances and amount of time in total (in hours) Barclays UK services have been unavailable to customers due to IT failure over the last two years, by Channel (i.e. app, web, branch, ATM, cards, etc)?

10. The number of customers that have been affected by each of those failures;

11. The amount of compensation that Barclays UK has paid to its customers due to IT failures over the last two years;

12. A description of the reason for those failures.

As stated, the other main banks are being asked questions 9 to 12 - at least some of this data is already collated and published but it'll be interesting to see the compensation figures, for example, assuming they don't try to hide behind commercial confidentiality....

Grumpy_chap

I suppose questions 9 - 12 will allow different banking businesses to be benchmarked against each other and then published, once normalised for size of business, in some kind of league table.

I wonder whether the banking league table will then be benchmarked and published against other sectors IT performance such as, oh I don't know, HMRC, NHS, Post Office, NATS...

gt94sss2

Someone should probably tell the Committee that banks have been publishing some of this information since 2018.

https://www.fca.org.uk/news/news-stories/better-information-current-account-services

friolento

Banks will probably be asking whether they are responsible to the PRA/FCA, or to a Parliamentary Select Committee. If the latter are unhappy with the PRA/FCA, perhaps they should be taking it up with them, rather than attempting to bypass them?

That aside, I wonder whether the Parliamentary Select Committee are aware that the recent Barclays outage also affected numerous indirect Barclays customers, such as those of us whose withdrawals from Gatehouse Bank were delayed. 

eskbanker

gt94sss2 said:

Someone should probably tell the Committee that banks have been publishing some of this information since 2018.

https://www.fca.org.uk/news/news-stories/better-information-current-account-services

Yes, that's what I was referring to, but it's very high level, simply giving total numbers of incidents by quarter and some breakdown by channel, rather than duration, impact, scale, cost, etc:

Total number of incidents reported
Incidents affecting telephone banking
Incidents affecting mobile banking
Incidents affecting internet banking

Ballard

friolento said:

Banks will probably be asking whether they are responsible to the PRA/FCA, or to a Parliamentary Select Committee. If the latter are unhappy with the PRA/FCA, perhaps they should be taking it up with them, rather than attempting to bypass them?

That aside, I wonder whether the Parliamentary Select Committee are aware that the recent Barclays outage also affected numerous indirect Barclays customers, such as those of us whose withdrawals from Gatehouse Bank were delayed. 

I would be surprised if the effect upon customers of third party financial institutions wasn’t included. All banks in the UK are required to have plans for Operational Resilience. One of the first things that they’ll have needed to have done is identify IBS’s (Important Business Services, not the medical alternative!). I would expect third party payments to have been designated an IBS. 

eskbanker

friolento said:

Banks will probably be asking whether they are responsible to the PRA/FCA, or to a Parliamentary Select Committee. If the latter are unhappy with the PRA/FCA, perhaps they should be taking it up with them, rather than attempting to bypass them?

It's pretty standard for select committees to approach organisations independently of, or sometimes as well as, industry regulators - the last time there was such a high profile outage, TSB in 2018, the then chief exec Paul Pester was summoned to appear in person for a kicking, alongside Andrew Bailey of the FCA (whatever happened to him....?) and others:

https://committees.parliament.uk/oralevidence/8064/pdf/

friolento

Ballard said:

friolento said:

Banks will probably be asking whether they are responsible to the PRA/FCA, or to a Parliamentary Select Committee. If the latter are unhappy with the PRA/FCA, perhaps they should be taking it up with them, rather than attempting to bypass them?

That aside, I wonder whether the Parliamentary Select Committee are aware that the recent Barclays outage also affected numerous indirect Barclays customers, such as those of us whose withdrawals from Gatehouse Bank were delayed. 

I would be surprised if the effect upon customers of third party financial institutions wasn’t included. All banks in the UK are required to have plans for Operational Resilience. One of the first things that they’ll have needed to have done is identify IBS’s (Important Business Services, not the medical alternative!). I would expect third party payments to have been designated an IBS. 

Sure, they will count each IBS as 1 customer but do they know how many end-user customers of each of their IBS customers were affected? And how & when these end-user customer customers have been informed  / received apologies / received compensation?

Yorkshire_Pud

They forgot question 13. Please tell us why these outages seem to occur on the last days/first days of the month when it causes the maximum problems for customers (especially if over a weekend when there is more limited staff cover presumably)?

Also perhaps a question 14. Why is Barclays so bureaucratic in its systems and procedures at the expense of concentrating resources on efficiency fit for banking in the 21st Century?

Hoenir

Yorkshire_Pud said:

Why is Barclays so bureaucratic in its systems and procedures at the expense of concentrating resources on efficiency fit for banking in the 21st Century?

Remember this is a Government that thinks building 1.5 million homes a year is an achievable aim. Upgrading inter linked often dated legacy systems is without doubt challenging. Probably the main stream banks will acquire Fintech's once the technology has been ironed out and upscaling is relatively easy. 

eskbanker

Hoenir said:

Remember this is a Government that thinks building 1.5 million homes a year is an achievable aim.

That figure relates to the target for the entire parliamentary term, not annually:

Our plan will include introducing mandatory planning targets to aim to deliver on our ambition to build 1.5 million new homes over the next five years. 

https://www.gov.uk/government/news/our-plan-to-build-more-homes