New analysis from Which? reveals that banks suffer five IT failures every week, shutting millions of customers out of accounts and making payments – as Which? calls for the next government to protect cash as a vital backup.
In the last year, the main UK banks suffered 265 IT shutdowns that have prevented customers making payments, the consumer champion’s analysis of FCA data has found.
The 265 IT glitches involved 133 incidents involving internet banking,111 mobile banking failures and 90 telephone banking outages. A glitch can often occur on more than one of these systems at the same time, but is counted as a single incident.
Some single incidents may have affected customers at more than one bank. This means the total number of unique incidents, as defined by the FCA is likely to be fewer than 265.
The Which? analysis found that RBS and Santander customers endured the most IT glitches last year – with both banks suffering 18 failures. This is followed by Barclays (17), Tesco Bank (16) and First Direct (15).
At the other end of the table, Starling Bank and M&S Bank both impressively went a whole year without a single glitch.
The FCA figures come after another turbulent week for TSB, which saw the bank faced with another systems issue that prevented customers from receiving payments.
The bank had made public the report into last year’s IT meltdown that dragged on for months and left 1.9 million customers shut out of their accounts. However, TSB suffered fewer glitches than many of its rivals, with only six in the last year.
The findings come as Which? launches a major new report – Everyday Finances – that reveals the nation’s banking habits and the challenges we face in protecting people’s everyday access to banking and payments.
At a time when lots of communities are experiencing reductions to their cash infrastructure across the UK – the report found nine in 10 people believe it is important that cash is preserved as a vital backup when digital systems fail.
The research also found that 11 million adults (22%) lack the confidence to do basic banking tasks online, despite the rapid transition to digital services and countless people having lost access to their local branch through branch closures.
Although banks are increasingly encouraging customers to move online, the research found that appetite for access to traditional banking remains strong – with two thirds (65%) stating that they would find it difficult to live their life without having access to a branch – at a time when the industry is carrying out widespread branch closures across the UK.
In fact, Which? discovered that three quarters of the population (75%) think everyday banking services should effectively be considered as a utility – as essential to the way they live their lives as having gas, electricity or water running in their homes.
Some 8.4 million (17%) people said they prefer to bank at a branch, which is perhaps unsurprising when the latest IT failures simply highlight how the industry cannot guarantee reliable online services.
The Which? report also found that despite the transition to online services, six in 10 felt it was important to maintain access to a bank account without requiring the customer to go online.
Meanwhile, a massive 94% had concerns about digital connectivity, while 92% are concerned by safety and security online.
The consumer champion believes this should act as a wake up call to the banking industry to ensure customers aren’t shut out of vital financial services through ongoing branch closures and a rushed transition to digital banking.
Banks are closing their branches at an alarming rate, with the UK having lost a third of its branch network in under five years as the industry moves towards an increasingly digital future.
Which? believes that if banks want to persuade their customers to move online and build trust in online services then they must ensure their systems are up to scratch.
In the face of widespread bank branch and cashpoint closures and regular IT glitches, the consumer champion is calling on the next government to introduce legislation that protects cash – not only for the millions of people who rely on it as a payment method, but also as a vital backup when digital banking systems fail.
Gareth Shaw, Head of Money, Which?, said:
“These findings show the industry is still failing to get to grips with alarmingly frequent banking glitches, which can cause real stress and frustration for millions of people left locked out of their account and struggling to make payments.
“In our nationwide survey, consumers have made it clear that cash is a vital back-up when digital systems fail – so it’s clear the next government should urgently introduce legislation to protect cash for as long as it is needed.”
Notes to editors
The FCA date relates to October 2018 – September 2019
The FCA’s data tallies the number of ‘major operational or security incidents’ suffered by banks in the past 12 months.
A major incident classifies as something that affects the ability of a significant number of customers to make transactions using internet, mobile or telephone banking.
With our partners, Collaborate Research, we conducted a large-scale deliberative research project that engaged 116 people from a cross-section of society. This included a series of focus groups and full-day workshops hosted in Glasgow, Cardiff, Morley and London.
Which? also commissioned two nationally representative telephone surveys to inform our findings. 1,002 GB adults were surveyed between 29 August and 2 September 2019 and 1,004 GB adults were surveyed between 22 and 27 August 2019. Fieldwork was carried out via telephone by Populus, with data weighted to be representative of the GB population (aged 18+).
Full table of results from FCA IT glitch data detailing the number of failures per bank:
Royal Bank of Scotland 18
Tesco Bank 16
First Direct 15
HSBC UK 15
Lloyds Bank 13
Ulster Bank 11
Virgin Money 11
Bank of Scotland 10
Intelligent Finance 10
First Trust Bank 8
Metro Bank 8
Bank of Ireland 7
Chelsea Building Society 6
Yorkshire Building Society 6
Danske Bank 5
The Co-operative Bank 5
Nationwide Building Society 4
B – Clydesdale & Yorkshire 3
Coventry Building Society 3
Monzo Bank 3
Clydesdale Bank 2
Yorkshire Bank 2
M&S Bank 0
Starling Bank 0