It’s the message that every bank customer dreads when they try to log on to internet banking: “We’re sorry, some kind of error has occurred when trying to establish a connection.”
Not sorry enough it seems for the big banks to have done anything of substance to address one of the most serious and persistent issues blighting high street banking.
There have been two tech outages this week alone that have left customers tearing their hair out.
On Tuesday, a three-hour IT failure at NatWest left thousands of frustrated customers across the UK without access to funds. One customer pointed out it was payday for many. Another – possibly speaking for banking customers everywhere – complained: “Online banking is always broken when I need it.”
A mere 48 hours later, thousands of TSB customers reported being locked out of their accounts after the bank suffered problems with its app and online banking services. “TSB online banking app seems to be constantly down”, one customer grumbled.
For many, it may have brought back memories of the bank’s catastrophic computer meltdown in 2018. The incident affected 1.9 million account holders, many of whom couldn’t access their money or pay bills for weeks.
That debacle should have been the turning point for an industry whose risible record of major IT foul-ups stretched back many years. TSB was left with a clean-up bill for compensation, fraud, and hiring an army of staff to handle a deluge of complaints totalling £330m. The UK’s sixth-largest lender at the time was hit with an FCA fine of nearly £50m too.
It also prompted a detailed inquiry from the Treasury Select Committee, which condemned the number of IT failures in the financial services sector as unacceptable. MPs recommended a raft of sweeping changes to ensure customers weren’t left “cashless and cut off”.
Five long years later, surely we are entitled to ask what has changed? Up-to-date data on the frequency of tech failures in banking today is hard to come by.
In the wake of the TSB crisis, the watchdog reported that there had been 600 outages over 12 months – a 137pc rise on the previous year. Perhaps most worryingly, in nearly a third of the cases, the banks in question had failed to inform the FCA of the root cause.
The findings prompted Tory MP Steve Baker, who was leading the subsequent select committee inquiry, to remark: “For too long, financial institutions issue hollow words after their systems have failed, which is of no help to customers left cashless and cutoff.”
Little has changed. The most recent FCA data shows there were 599 so-called “operational incidents” in 2021 and 588 in 2022 among the retail banks, insurers, and consumer finance providers.
There is little evidence that banks are taking the issue more seriously. Tuesday’s issues at NatWest were met with a short statement on social media that sounded like it had been written by a bot: “Thank you for your patience and apologies for any inconvenience caused.”
It perfectly encapsulates the industry’s approach to service. Customers are being taken for fools. For many people, being unable to pay your bills on time comes with immediate real-world consequences that go far beyond a moment of “inconvenience”.
