Nine major banks and building societies in the UK have accumulated at least 803 hours—equivalent to 33 days—of IT outages over the past two years, according to figures released by the Treasury Committee. The report sheds light on the significant disruptions caused by these failures, which have affected millions of customers. The Treasury Committee, which has been investigating the impact of banking IT failures, compelled Barclays, HSBC, Lloyds, Nationwide, Santander, NatWest, Danske Bank, Bank of Ireland, and Allied Irish Bank to provide data on service disruptions. The figures do not include recent high-profile outages at Barclays in January and Lloyds last week—both of which coincided with payday, leaving customers unable to pay their bills or salaries.
Committee Chair Dame Meg Hillier emphasized the serious impact on individuals living paycheck to paycheck, calling the frequency of outages “completely unacceptable.” She stated, “For families and individuals, losing access to banking services on payday can be a terrifying experience. The fact that there have been enough outages to fill an entire month over two years shows that customers’ frustrations are entirely valid.”
Barclays is set to pay between £5m and £7.5m in compensation for service disruptions that caused “severe degradation” in online payments, impacting more than half of transactions during a major outage in January. When factoring in additional compensation for affected customers, the bank could pay out up to £12.5m. One of the most severe cases involved Emily McAllister from Melton Mowbray, Leicestershire, whose house move was delayed due to the Barclays outage. She and her daughter, who has Down’s syndrome and autism, were forced to spend several nights with family and in a hotel. “It should have felt like a fresh start, but instead, it was completely tainted,” McAllister told BBC News. In response, Barclays UK CEO Vim Maru attributed the January outage to a software issue, ruling out cyber-attacks or malicious activity. The bank stated, “We continue to work through the impact to ensure no customer or client will be out of pocket as a result of the incident.”
While Barclays leads in total compensation payouts, other banks have also faced financial penalties: Bank of Ireland – £350,000, AIB – £590, HSBC – £232,697, Lloyds – £160,000, Nationwide – £77,452, NatWest – £348,000, and Santander – £17,000. The findings come as Santander customers reported service disruptions on Thursday, affecting access to both mobile banking and physical branches. Santander acknowledged the issue, stating, “We’re aware that customers are currently unable to access some of our services. We’re very sorry for the inconvenience this is causing, and we are working hard to fix the problem as soon as possible.”
Industry experts have criticized traditional banks for failing to modernize their IT infrastructure. Patrick Burgess of BCS, the Chartered Institute for IT, stated, “This report highlights yet again that the traditional banking sector has not kept pace with the investment needed to upgrade its infrastructure.” Shilpa Doreswamy, a director at GFT—a company focused on financial sector digital transformation—warned of the far-reaching consequences of outdated banking systems. “For customers, these outages aren’t just frustrating—they can be devastating. When legacy banking infrastructure keeps failing, customer trust collapses with it.”
The Treasury has acknowledged the committee’s findings and reaffirmed its commitment to strengthening banking resilience. A spokesperson stated, “We are working with financial authorities to regulate third-party suppliers and considering whether banks are doing enough to provide the level of service customers expect.” The report has sparked calls for banks to take immediate action to prevent further disruptions and to ensure customers are adequately compensated when IT failures occur. The question now is whether the sector will invest in the necessary technological improvements to prevent future crises—or continue facing mounting financial and reputational damage.
