Millions ‘left cashless and cut-off ’ by bank IT failings
REPEATED computer failures at the big banks which have left millions of people ‘cashless and cut-off’ have been condemned by MPs.
The Treasury select committee is demanding action by the Government and City watchdogs to ensure banks have robust online systems to end the scandal.
The failures are far more than a simple inconvenience, for they mean people are unable to use cash machines or pay for everyday items such as groceries, petrol, or buy a bus or rail ticket.
And customers who cannot get online can struggle to pay bills, leaving them open to penalty charges. Major failures at TSB, Visa and Barclays have hit millions over the past two years, however, there were also many other IT crashes where services went offline for short periods.
The issue is particularly important at a time when banks are trying to push people towards using cards, internet banking and smartphone apps, while also closing down branches and freeto-use cash machines.
The MPs said financial sector levies on the banks may need to be increased to ensure the regulators, the Financial Conduct Authority, Prudential Regulation Authority, and the Bank of England, have the money and staff to police the industry.
TSB suffered a high-profile IT failure last year which saw up to 1.9million people lose access to online banking services, following the introduction of a new system. The Visa card system crashed last summer blocking millions of payments in the UK and Europe. And Barclays, RBS and others have suffered a series of IT outages.
Treasury committee member Steve Baker 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 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 cutoff.’ The MPs criticised a delay by regulators to explain TSB’s IT collapse.
Mr Baker said: ‘For too long, we have waited for a comprehensive account of what happened during the TSB IT failure. Our inquiry into service disruption at TSB remains open.’
Jenny Ross, editor of Which? Money, said: ‘Daily IT glitches are leaving too many people struggling to pay bills or buy everyday essentials, so the committee is right to hold the industry and regulators to account for these frequent system failures.
‘In a climate of rapidly disappearing bank branches and cash machines, people are increasingly reliant on online banking and digital payments. If uninterrupted access to banking services is not possible, it is essential cash is preserved as a back-up for when these systems inevitably fail.
‘Regulators must swiftly address the committee’s concerns, and the Government must introduce legislation that guarantees consumers can access and pay with cash for as long as it is needed.’
Stephen Jones, the chief executive of UK Finance, which speaks for the banks, said: ‘Operational resilience is crucial in a modern financial system and the industry continues to invest billions to ensure systems, human and digital, are robust and secure...
‘Digital innovation is transforming the way money is managed with 24/7 access to payment systems, increasing the range of day-to-day banking options and providing better back-up for customers if a service is temporarily disrupted... ‘UK Finance continues to engage with government over how co-ordination between regulatory authorities could be improved, seeking to avoid overlapped or rushed mandatory change programmes that impact firms’ ability to protect their customers.’
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