Outage fever strikes UK banks

Outage fever strikes UK banks

A spate of online banking glitches has hit the UK's leading high street banks, leading inevitably to discussions of resilience and operational risk in the industry.

No sooner had Barclays announced that it had resolved a glitch to its online banking service that affected customers on Thursday, than customers of RBS, NatWest and Ulster Bank reported being unable to access their online banking services.

The latest problems emerged at 5am this morning and the time of writing remained unresolved. An RBS spokesperson said: "We are aware that customers are experiencing issues and are working to fix it. "Customers can still use ATMs and telephone banking or visit their local branch."

As yet no explanantion has been given for either the Barclays or RBS/NatWest/Ulster bank outages.

Barclays suffered an outage on Thursday that left millions of its customers locked out of their online banking accounts for more than six hours.

The problem affected both website and telephone banking services and prompted a predictable storm of complaints on social media.

Barclays had attempted to placate customers with updates on its website. “We’re sorry if you’re unable to access online banking, telephone banking, or use some parts of our app. You can still check your balance and use most features in the app... Our teams are working to fix the problem … Thanks for your patience.”

After 5pm the bank said the problem had been fixed. “We’re very sorry about the technical problems our customers have experienced today. Everything is now back up and running and we’re really grateful for customers bearing with us.”

However, the ire of Twitter users continued throughout the day, raising the question of compensation for affected customers. On tweet read: “@BarclaysUK Pensioners are going without food … some of us can’t pay our rent … because of no access to our Barclays accounts. Corporate banking has ruined Barclays. How do you intend to compensate yr customers? When will the system be up and running? The only bank where it happens.”

The problem though is that Barclays is not the only bank where it happens. Far from it. 

In recent weeks and months there have been similar problems at TSB, Tesco Bank and, most recently Cashplus, the digital-only challenger bank that targets customers with poor credit histories.

The IT meltdown at TSB happened in April and was the result of a botched IT platform migration. A government-commissioned report into the case conducted by law firm Slaughter & May is currently underway and is expected to be published before the end of the year. 

What is known is that the problem was a result of trying to move its banking service from an old platform to a new one. It is a problem that has long affected the industry and has often been the cause of service glitches. 

The cause of the Barclays issue has not yet been revealed but the case has again led to more comments from IT engineers about the fragility of bank's core, legacy IT and the problems associated with making any changes to these systems.

For example, Lev Lesokhin, a senior vice president at software consultant Cast, said that its recent research on application software showed that banks have "the weakest software and coding practices" with "decades-old legacy IT systems" while the skills required to maintain and update the current IT infrastructure "are on the wane". 

This is making banks "nervous about touching old systems for fear of causing an outage" as well as "making banks' systems harder to fix whenever there is an issue". 

But any notion that outages and IT glitches are restricted to the legacy banks of the high street, encumbered by their decades-old banking systems, has been contradicted by the outage at two newer banking services. Tesco Bank suffered two outages in six weeks earlier this year. 

And the aforementioned Cashplus suffered a similar problem on September 17, just days before the Barclays outage. Cashplus, which offers pre-paid digital credit cards and payment transfers, does not have a banking licence as yet, which has raised questions about the level of supervision which should be applied to challenger banks. 

The issue was addressed by the UK's Treasury Committee chairman and MP Nicky Morgan..

“While Cashplus may not be regulated as a bank, it claims to offer ‘the UK’s most seamless banking services experience’,” Ms Morgan said. “Its customers rightly expect continuous access to their accounts, and it should be held to the same standards of operational resilience as a retail bank.

“I have written to Mr Wagner with questions about the causes and consequences of the service failure,” she added.

Wagner has been given a deadline of September 28 to respond to a parliamentary committee to explain the causes of the outage as well as the controls it has in place to prevent and mitigate the fallout from such technical problems.

The same committee has already called payment services firms PayPoint and Visa, as well as bank TSB over their respective problems. 

The committee members should probably look at clearing space in their diaries for further hearings given the events of this week.

Comments: (4)

George Stein
George Stein - Redbird Consulting - Epsom 21 September, 2018, 11:25Be the first to give this comment the thumbs up 0 likes

The UK ring-fencing rules will separate the really risky bits of each bank from the rest. Now, which is which?? 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 September, 2018, 14:10Be the first to give this comment the thumbs up 0 likes

While outage of banking systems is not acceptable, is it really possible that "Pensioners are going without food" due to a six hour outage? Or is this an attempt at sensationalism in order to grab attention? (not that there's anything wrong with sensationalism). 

Shreya Nair
Shreya Nair - Go-Live Faster - Pune 25 September, 2018, 14:34Be the first to give this comment the thumbs up 0 likes

Time to rethink how complex system implementations migrations are approached! Most tests are not designed for reality and often lead to false results. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 25 September, 2018, 15:26Be the first to give this comment the thumbs up 0 likes

It may be argued that most tests ARE designed for reality, just that of meeting pre-ordained milestones like go-live date:)

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