Treasury committee demanding answers on IT outages

jimjames

friolento said:

Ballard said:

friolento said:

Ballard said:

friolento said:

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?

I’m quite sure that they will have needed to have considered each IBS in detail. The idea of OpsRes is to consider the impact that an outage would have on the customers (including third party), the bank itself, and the whole market. They would have had to take into consideration that third party financial institution customers would have been affected. 

As a Gatehouse customer whose withdrawal got delayed by the Barclays issue, I am quite sure that Barclays have not considered the impact on me. Or if they did, they kept it rather quiet. I got no apology or other communication regarding the issue from Gatehouse or from Barclays. All I could see was a general message on the Gatehouse website, which I don't usually use as I prefer the app, that they are experiencing some delays.

Barclays were never going to contact you as I’d assume that they don’t have access to your contact details. That doesn’t mean that the impact that you suffered wasn’t taken into account.

i should point out that I’m not making excuses for Barclays. Hopefully everyone affected will be adequately compensated.

Valid point that they don't have my contact details. Equally valid is that they have no idea how their issue has impacted me without asking me, and therefore cannot take it into account. If they had been interested, they could have worked with their partners (Gatehouse in my case) to establish the impact in some way.

I would suggest that maybe you might want to submit info to the Treasury Select committee to ensure they are aware of the impact on third parties that may not be in the Barclays response.

eskbanker

The committee has now published the responses it received from the banks, although this is caveatted by the lack of inclusion of the full effect of the major Barclays outage in January and February, and also the others at the end of last week:

Nine of the top banks and building societies operating in the UK accumulated at least 803 hours, the equivalent of more than 33 days, of unplanned tech and systems outages in the last two years, new data published by the Treasury Committee shows.

• Read the letter from Bank of Ireland UK, relating to the impact of IT failures, dated 27 February 2025
• Read the letter from Nationwide Building Society, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from Danske Bank, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from NatWest Group, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from HSBC UK, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from Santander UK, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from Lloyds Banking Group, relating to the impact of IT failures, dated 26 February 2025
• Read the letter from Allied Irish Banks Group (UK), relating to the impact of IT failures, dated 26 February 2025
• Read the letter from Barclays UK (including a separate annex), relating to the impact of IT failures, dated 26 February 2025
• Read all correspondence published by the Treasury Committee
• Treasury Committee

At least 158 banking IT failure incidents affected millions of customers’ ability to access and use services between January 2023 and February 2025.

The data referenced above does not include the most recent outages affecting Barclays customers between 31 January – 2 February and various banks on 28 February, disruption which left many people distressed on payday and prompting concerns from MPs. The Committee will be requesting further information from those organisations involved in those instances.

Despite not including the information in their aggregated figures, Barclays were able to provide some data on the recent outage which lasted for several days. The bank confirmed 56% of online payments during the incident failed due to ‘severe degradation’ of their Mainframe processing performance. The Bank confirms it expects to pay between £5 million and £7.5 million in compensation to customers for ‘inconvenience or distress’.

When taking into account all of the information shared by Barclays, this means the bank could pay out up to £12.5 million in compensation due to outages. The second highest amount paid out by a firm in the last two years is £350,000 by the Bank of Ireland.

The information is contained in correspondence from Barclays, HSBC, Lloyds, Nationwide, Santander, NatWest, Danske Bank, Bank of Ireland and Allied Irish Bank. Each bank and building society was asked the same questions on outages in outgoing letters from the Chair of the Treasury Committee last month. Barclays had additional questions about its response to its 31 January – 2 February outage.

Common reasons given for the IT failures include problems with third-party suppliers, disruption caused by a change in systems and internal software malfunctions.

https://committees.parliament.uk/committee/158/treasury-committee/news/205611/more-than-one-months-worth-of-it-failures-at-major-banks-and-building-societies-in-the-last-two-years/

Beyond the top two (Barclays and BoI), the costs by bank aren't summarised in the above but other outlets have done the legwork, such as the BBC:

The compensation paid out by other banks was:

• AIB (£590)

• HSBC (£232,697)

• Lloyds (£160,000)

• Nationwide (£77,452)

• NatWest (£348,000)

• Santander (£17,000)

https://www.bbc.co.uk/news/articles/cjd3yzx3xgvo