The FCA operational resilience deadline of 31 March 2025 is almost upon us. Unplanned bank tech and system outages seem to be rarely out of the news. And now the UK Parliament’s Treasury Select Committee has waded into the debate. Dynatrace’s UK & Ireland Regional Director, Financial Services, Martin Bradbury, tells RBI that the TSC inquiry into bank IT failures should serve as a wake-up call to the banks.
It reported on 6 March that there were at least 158 banking IT failure incidents that affected millions of customers’ ability to access and use services between January 2023 and February 2025. In total, the system outages add up the equivalent of some 33 days.
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And that figure does not include the most recent outages affecting millions of Barclays customers between 31 January and 2 February. Further disruption occurred at various banks on 28 February.
Common reasons given for the IT failures include problems with third-party suppliers, disruption caused by a change in systems and internal software malfunctions. To date, compensation payments to individual impacted customers have been modest. Barclays confirmed that 56% of online payments during the incident failed due to ‘severe degradation’ of their mainframe processing performance. Barclays expects to pay between £5m and £7.5m in compensation to customers for ‘inconvenience or distress’.
When taking into account all of the information provided by Barclays to the TSC, this means the bank could pay out up to £12.5m in compensation due to outages. Until the Barclays systems issues, the highest amount paid out by a firm in the last two years was just £350,000 by Bank of Ireland.
UK banks bad run of IT outages
“We’ve had a particularly bad run over the past few months of these incidents with at least two of them falling on, arguably, the worst possible day of the month for those payment issues to occur,” Bradbury tells RBI.
“People are trying to pay bills. They’re trying to send salaries. They’re trying to receive salaries. And having a number of those high-profile incidents in such a short space of time is going to prick the ears of the powers that be in the Select Committee. We’re so dependent on these digital services now that we struggle to operate without them. So, I think it is a big warning.”
He says that the practicalities and the challenges of actually implementing a strategy to deal with potential IT failures are significant, when one considers how most of the organisations are organised.
“They organise themselves in in silos, around product lines, around parts of their technology infrastructure. They have tools and monitoring capabilities that look into one part of the ecosystem.
“We’re working with a lot of organisations to transform that siloed viewpoint into an end-to-end view of their digital ecosystem. This brings all of that together and uses artificial intelligence and automation to tell them very quickly ‘you know an outage has happened or an outage is coming.’ This is the business impact, the customer level impact.”
As two client examples, Bradbury references the firm’s work with BNZ and Toronto Dominion.
“At Dynatrace, we take a radically different approach to how many organisations would record monitoring historically. We bring a platform with artificial intelligence and automation to help organisations manage their digital ecosystem. That means we help organisations massively reduce major incidents. We saw BNZ in New Zealand reduce its major incidents by 94% through implementation of Dynatrace. At TD, we helped it respond 25% faster to incidents as a result of implementation. It saves hours and hours of manual toil through smart use of technology.”
Banks must improve their customer communication
He adds that there will always be some technology failures and human process failures. There will be mistakes made that will cause customer impact. But the aim has to be for firms to know about these issues before customers do and then undertake the essential remedial work quickly. In addition, he highlights the need for better customer communication and ensure customers can be told how long it will take before the service will be restored.
“Some organisations are very advanced on that journey and some organisations are not yet fully enabled in that type of strategy. There still remains a huge amount of work to do.”
