UK Banks Face Millions in Compensation Due to IT Failures

A report from the Treasury Committee reveals that nine major banks in the UK have experienced at least 803 hours of IT outages in the past two years, leading to significant disruption for customers. These outages, amounting to 33 days in total, have caused financial difficulties, particularly for individuals relying on timely transactions. Barclays, HSBC, Lloyds, Nationwide, Santander, NatWest, Danske Bank, Bank of Ireland, and Allied Irish Bank were compelled to disclose outage data. Barclays alone could pay up to £12.5 million in compensation, largely due to a January 2024 outage that left some customers unable to access funds, including one family that became homeless. The Treasury Committee hopes that making this data public will pressure banks to modernize their infrastructure and minimize future disruptions. Other banks, including HSBC, Lloyds, and NatWest, have also paid compensation, though significantly lower amounts. Barclays attributed the January outage to a software issue rather than a cyberattack. Experts criticize the banking sector for failing to invest adequately in IT systems, which continues to affect millions of customers.