Thousands of UK bank customers were struggling to access their accounts on Friday, prompting concerns among MPs as lenders continue to close branches in a wider push towards digital banking.
The IT failures meant customers of TSB, Nationwide, First Direct and Lloyds Banking Group – including its Lloyds, Halifax and Bank of Scotland brands – were struggling to log into online bank accounts or suffering from payment delays.
The issues were worsened for customers who were ready for payday, often scheduled on the last day of the month. Most services were restored by Friday afternoon.
It is the second month in a row that users have had to grapple with delays on crucial days for payments. At the end of January, an IT glitch left some Barclays customers locked out of their accounts for almost 24 hours on what was also HMRC’s deadline day for settling self-assessment tax returns.
MPs on the influential Treasury committee have demanded answers from banks and wrote to the chief executives of lenders including Lloyds, NatWest, Santander, Nationwide, Barclays and HSBC in early February. Executives were ordered to give details of the outages, how they affected customers, how their board responded, and how they planned to prevent future problems. The committee was due to publish lenders’ responses in the coming days.
However, Friday’s outages are understood to have raised further concerns among MPs. The Treasury committee is assessing its options and will consider next steps next week, a person close to the committee said.
The outages come amid a wider push towards digital banking by lenders who are facing growing competition from online-only lenders such as Monzo, Revolut and JP Morgan’s Chase.
Lenders who once dominated the high street have continued shutting branches, in a move they say is justified by dwindling use of in-person banking. It has led to thousands of closures, with the number of branches across the UK falling from roughly 10,565 in 2014 to 6,870 by 2024, according to British Banking Association and Office for National Statistics data.
But repeated IT failures have highlighted the importance of providing face-to-face and manual banking services, ensuring that neither lenders nor their customers are held hostage by tech glitches, IT meltdowns or cyber-attacks.
The regulator has tried to curb the prospect of banking deserts. As of last year, the Financial Conduct Authority requires banks to hold off from closing their sites until they can guarantee access to cash will not be affected. But that has resulted in banks pushing customers towards alternatives, including banking hubs or Post Offices that offer cash services.
Commenting on the latest outages, UK Finance defended its members, who it said worked hard to fix any IT problems affecting customers.
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“All banks invest heavily in their systems and technology to ensure customers have easy access to banking services,” the banking industry lobby group said. “Where issues arise, they work extremely hard to rectify them quickly and to support their customers. Banks have been posting information on their websites and social media accounts to ensure they keep customers updated.”
But Reena Sewraz, the retail editor at the consumer group Which?, said users should keep track of how the outages affected them, in case they could claim compensation. “These latest IT issues could cause real headaches for thousands of customers – made worse because it’s payday for many of them.
“It’s crucial that all affected banks keep customers updated and move quickly to compensate for any losses that may result from today’s outages. Customers should keep evidence of impacted payments should they need to make a claim. If customers have missed important payments, they should contact the relevant company to ensure they waive any fees incurred.”
Article by:Source: Kalyeena Makortoff and Mabel Banfield-Nwachi
