MPs have suggested levies paid by the financial services sector be increased so regulators can hire more "experienced" staff.
The Financial Conduct Authority, Prudential Regulation Authority and Bank of England faced the call made by the Treasury committee in its report on IT failures in the financial services sector published today (October 28).
The committee found the regulators needed to do more in response to the "unacceptable" number of IT incidents in the industry, including using their enforcement powers to ensure failures "do not go unpunished".
The committee said: "We accept the regulators' current budgets make hiring staff with skills and experience in operational resilience challenging,
"The regulators should increase financial sector levies to ensure they can hire staff with the expertise and practitioner experience they need.
"We do not expect to hear after the fact, perhaps in reaction to a major incident, that supervisory resources were inadequate."
The Treasury committee launched its inquiry in November 2018 following a series of high-profile IT failures in the sector, including the TSB IT migration that plagued the bank and its customers earlier that year.
The report found the impact of IT failures in the sector ranged from "inconvenience or harm to customers" to threats to a firm's viability, but MPs warned the "lack of consistent and accurate" recoding of the incidents was concerning.
Steve Baker MP, the Treasury committee’s lead member for the inquiry, warned for too long financial institutions had issued "hollow words" after their systems have failed which did not help customers left "cashless and cut-off".
Mr Baker said: "The committee, therefore, launched this inquiry to look ‘under the bonnet’ at what’s causing the proliferation of such incidents, and what the regulators can do to prevent and mitigate their impacts.
"The regulators must take action to improve the operational resilience of financial services sector firms.
"They should increase the financial sector levies if greater resources are required, ensure individuals and firms are held to account for their role in IT failures, and ensure that firms resolve customer complaints and award compensation quickly."
Mr Baker also warned the committee had waited too long for a "comprehensive account" of what happened during the TSB IT failure and was keen to examine the progress of the regulators' investigation.
The committee also found firms were not doing enough to mitigate the operational risks they faced from their own legacy technology, which could ultimately lead to IT incidents.
MPs warned regulators must ensure firms cannot use the cost or difficulty of upgrades as excuses to "not make vital upgrades to legacy systems".
The committee said: "To ensure accountability for failures, regulators must have teeth and be seen to have teeth."
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