Britain’s Banks Need IT Investment Now To Prevent Technology Failures Says Top Lawmaker

The high profile technology failures of UK retail banks in recent years have prompted senior UK lawmaker Andrew Tyrie to call for the banks to make themselves more resilient by investing in IT now.

Mr Tyrie who is the chairman of parliament's Treasury Committee has been reported as saying that a succession of bank IT blunders and weaknesses have been responsible for causing businesses to suffer, and exposing millions of people to uncertainty, distress, disruption and major inconvenience.

What Blunders?

The succession of IT blunders that have prompted the recommendations make depressing reading, and the sheer number and frequency appear to make s strong case for IT investment now. The high profile banking IT blunders of recent years include:

  • June 2012: An IT failure at RBS, NatWest and Ulster Bank locked customers out of their accounts for days (weeks for Ulster Bank customers).

  • March 2013: A system failure at NatWest left millions of customers temporarily unable to withdraw cash or make transactions.

  • December 2013: An IT glitch at RBS left millions of shoppers unable to pay for transactions using their credit or debit cards on one of the busiest shopping days of the year, and RBS suffered a cyber attack which prevented customers form accessing their accounts.

  • January 2014: Lloyds and TSB suffered a technological meltdown that prevented many customers from being able to withdraw money or use credit cards.

  • August 2015: An IT failure at HSBC meant that business customers couldn’t pay salaries to staff or make payments to suppliers just before the bank holiday weekend.

No-one Directly Responsible

In a letter to Andrew Bailey, the deputy governor of the Bank of England Mr Tyrie said that one of the main reasons why the blunders keep happening is that “Currently, no one group seems to be directly responsible for developing a full understanding of the risks carried”.

Mr Tyrie suggested therefore that Mr Bailey, who heads its banks BoE's Prudential Regulation Authority supervisory arm, should be allocated the task of ensuring the banks develop more resilience in terms of their IT systems. Mr Tyrie has recommended that Mr Bailey should be the person to take a leadership role in IT issues that pose risks to the banking system, and should therefore help all UK banks to develop more resilient and robust banking and payment systems.

IT Improvements Promised - Some Good News For Business

Some good news for business so far is that state-backed Royal Bank of Scotland has promised to invest 150 million pounds a year to improve the resilience of its computer systems. Its Chief Administration Officer Simon McNamara pointed out however that "It is not feasible to have 100 % faultless systems.

We will have issues. How we respond to those issues, how we minimise them and how we fix them, is crucial”.