Online bank gremlins leaving customers ‘cashless and cut off’

Customers are being left “cashless and cut off” by unacceptable IT failures in the financial services sector, according to a new report from the UK Government’s treasury select committee.

MPs said the current level and frequency of online banking disruption and the consumer harm it caused was not acceptable and prolonged IT failures should not be tolerated.

With bank branches and cash machines disappearing, customers are increasingly expected to rely on online banking services.

But these have been significantly disrupted due to IT failures, harming customers left without access to their financial services, the committee said.

Firms offering such services were urged to resolve customer complaints and award compensation quickly.

Meanwhile, financial sector levies may need to be increased to ensure that regulators the Financial Conduct Authority, Prudential Regulation Authority, and the Bank of England are sufficiently staffed.

Steve Baker, the treasury committee’s lead member for the inquiry, said: “The number of IT failures that have occurred in the financial services sector, including TSB, Visa and Barclays, and the harm caused to consumers is unacceptable.

“The committee, therefore, launched this inquiry to look ‘under the bonnet’ at what is causing the proliferation of such incidents, and what the regulators can do to prevent and mitigate their impacts.

“The regulators must take action to improve the operational resilience of financial services sector firms.

“They should increase the financial sector levies if greater resources are required, ensure individuals and firms are held to account for their role in IT failures, and ensure that firms resolve customer complaints and award compensation quickly.

“For too long, financial institutions issue hollow words after their systems have failed, which is of no help to customers left cashless and cut off.”