One bank every day is struck by an IT meltdown
BANKS are suffering IT failures at the rate of one a day, threatening access to cash and blocking essential purchases for groceries and transport.
Customers were prevented from making payments on 302 occasions in the last nine months of last year, consumer experts Which? said.
They added that efforts by banks and retailers to make customers switch from real money to plastic cards and electronic payments must be resisted, as the data shows how the technology used in the UK’s finance system can be fragile.
Since last year, the Financial Conduct Authority has required banks to inform it of operational or security incidents which prevent customers from using payment services.
Which? found the average number of significant breaches across each of the 30 banks and building societies it listed was one a month. It said Barclays reported the most (41), followed by Lloyds Bank (37), Halifax/Bank of Scotland (31), Natwest (26), RBS (21) and Ulster Bank (18).
TSB, whose botched introduction of a new IT system last year caused customers to lose access to online banking services, reported 16 incidents.
These technical failures often go far beyond minor glitches with people unable to access their money, monitor online accounts or make payments for everyday essentials, such as groceries or bus rides.
Which? said the figures ‘reveal that serious banking crashes are even more common than previously thought’.
It is calling on the Government to give a single regulator the statutory duty to protect access to cash and build a ‘susrefuse tainable cash infrastructure’. This would respond to concerns among millions of customers and small firms that banks are trying to phase out real paper money and coins by stealth.
Recent research found that ‘hole in the wall’ cash machines are closing at a rate of almost 500 a month while the nation’s banks are racing to axe branches in order to cut costs – with more than 3,300 closing since 2015.
The move against cash is also being pursued by retailers, particularly supermarkets, many of which no longer take cheques.
Transport bodies, such as Transport for London, now to take cash on buses and trams in a wholesale switch to electronic payments through the Oyster card, bank cards or mobile phone apps.
Similar apps are being used on mainline train services.
Editor of Which? Money, Jenny Ross, said the research ‘highlights why it is so important that a regulator is given responsibility to protect cash as a backup when technology fails’.
An independent investigation into the future of money, the Access to Cash Review, has also warned of the risks of ‘sleepwalking into a cashless society’.
Its chairman, Natalie Ceeney, the former Financial Ombudsman, said: ‘For millions of people in the UK, cash is not a choice, it’s a necessity. As cash use continues to fall, we need to safeguard the use of cash for those who need it and at the same time work hard to ensure that everyone can participate in this digital economy.’
Industry trade body, UK Finance, said: ‘When incidents do occur, firms work around the clock to minimise disruption and get services back up and running as quickly as possible.’
Barclays, defending its record, said: ‘We take IT resilience extremely seriously and we welcome transparency for our customers, which is why we report every incident to the regulator – even minor glitches that have minimal impact on customers.’
‘Cash isn’t a choice – it’s a necessity’