HM Treasury  

Inquiry into industry IT failures launched

Inquiry into industry IT failures launched

The Treasury Committee has launched an inquiry into IT failures in the financial services industry after multiple failures in the sector in recent years.

Announced today (November 23), the inquiry will examine the technological capabilities of financial services institutions and their ability to guard against service disruptions.

The committee will appoint a specialist adviser to the inquiry, who will analyse the common causes of technological failures in the sector and the extent to which consumers are affected by any outages.

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The inquiry will also consider whether regulators have the relevant skills to hold those responsible for service disruptions to account.

Nicky Morgan, chairwoman of the Treasury committee, said the number of IT failures at banks and other financial institutions in recent years was "astonishing".

Ms Morgan referenced IT issues at Equifax, TSB, Visa, Barclays, Cashplus and RBS, all of which took place in the 16 months since she became chairwoman of the committee.  

In September, IT issues saw customers of NatWest and Barclays unable to access their online banking services for 24 hours. 

TSB has been plagued by IT issues since April, when the bank began moving customer data from a system controlled by its former owner, Lloyds Banking Group, to a new system built by its new owner, the Spanish banking group, Banco Sabadell.

She said: "Millions of customers have been affected by the uncertainty and disruption caused by failures of banking IT systems.

"Measly apologies and hollow words from financial services institutions will not suffice when consumers aren’t able to access their own money and face delays in paying bills."

As bank branches close and customers are ushered towards online services, the availability of those services is vital, Ms Morgan said.

She added: "The committee has launched this inquiry to consider the causes and consequences of these failures, and will examine what industry and regulators are doing to promote operational resilience."

Last week TSB appointed a new chief executive in the wake of the IT debacle which saw almost two million people locked out of online banking services in April.