Major upheavals hit UK banks as millions of customers have found themselves locked out of their accounts during pivotal moments. After extensive scrutiny of the banking sector's IT infrastructure revealed more than 33 days’ worth of outages over the last two years, the public outcry has compelled banks like Barclays, Santander, and others to reevaluate their technological systems.
On March 6, 2025, countless Santander customers reported difficulties accessing their accounts, prompting the bank to issue a public apology. According to the bank, it was "aware" of users being unable to connect to services, expressing deep regret for the inconvenience this has caused. The incident falls within the broader scope of what the Treasury Committee has recently examined, laying bare the extensive failings across multiple institutions.
A startling report released by the Treasury Committee disclosed there have been at least 158 IT incidents among nine of the UK’s largest banks from January 2023 to February 2025, accumulating more than 803 hours – equivalent to 33 days – of downtime. Included within this troubling statistic is the January 2025 glitch at Barclays, which left over half of online payment attempts failing due to severe degradation of their systems.
"For families and individuals living paycheck to paycheck, losing access to banking services on payday can be a terrifying experience," said Dame Meg Hillier, the committee's chair, emphasizing the gravity of these IT failures. The timing of such outages tends to compound their effects. For example, the Barclays outage coincided with payday and the looming tax return deadlines, causing added stress for customers.
The inefficiencies relate back to the banks' aging IT infrastructure, which struggles under growing digital banking demands. Financial technology expert Chris Skinner noted, "The competence of keeping up with these changes is really challenging every bank." He warned the industry is vulnerable to clustered incidents due to shared financial IT infrastructures among institutions. The financial sector’s reliance on third-party suppliers has also become clear, with mistakes having ripple effects across several banks.
Barclays has confirmed it anticipates compensation payouts between £5 and £7.5 million for claims related to the January outages. This figure is part of total compensation costs estimated to reach up to £12.5 million from various incidents over the last two years. Despite Barclays being under the spotlight, it's important to note other banks, such as HSBC and Lloyds, have also suffered significant outages, with compensation payments less substantial at £232,697 and £160,000 respectively.
According to the data reviewed by the Treasury Committee, disability to access services during peak times leaves customers vulnerable. Barclays had reported delays impacting users’ ability to make payments, where over 56% of attempted transactions originated failed on the first day following the outage. These figures point to the need for substantial reform within the financial sector to avoid future interruptions and to provide adequate compensation for the affected consumers.
Customers who have endured disruptions are encouraged to apply for compensation, but the process can often be cumbersome. While the Financial Conduct Authority (FCA) does not mandate automatic compensation for every occurrence, banks must respond to claims fairly. This can lead to delays and frustrations for customers seeking reimbursement for expenses incurred due to the outages, such as missed bills or charges related to overdrafts.
The disparity across banks' compensation responses highlights potential inequities within the system, leading consumers to seek clarity on how claims are handled. For example, Barclays has suggested it will manage claims carefully to avoid any customers being financially disadvantaged as a result of the outages.
Despite the pressing need for more accountable service, many are voicing frustration. The call for enhanced reliability and operational resilience within banks is louder than ever, with advocates arguing these measures are necessary not just for rectifying errors, but for maintaining trust amid chaotic service interruptions. Experts assert banks must do more to assure customers of their financial security.
Dame Hillier remarked, "Banks must prioritize resilience and transparency to maintain consumer trust," urging the financial sector to avoid another spate of outages. Meanwhile, various parties continue to push for heightened scrutiny of IT systems across the board. The Treasury Committee's findings cultivate hope for forthcoming regulatory advancements targeting third-party supplier accountability, setting higher standards for service delivery.
To combat these failures proactively, institutions need to confront the systemic issues plaguing their operations. Addressing the criticism around modernizing banking infrastructural systems requires undivided attention and investment. There’s consensus among experts and regulators alike: Without serious strategic refinements and accountability, both the customers and the banks will remain trapped within cycles of disruption.