Bank customers are being left "cashless and cut off" due to an unacceptable number of IT failures, a report by MPs into online banking has ruled
Parliamentarians were scathing of the service provided by some banks, with MPs saying the current frequency of disruption and consumer harm was not acceptable.
With the number of bank branches and cash machines disappearing, customers increasingly rely on online banking services, but have been left without access to their funds.
MPs warned that financial sector levies may need to be increased on banks to ensure regulatory bodies are adequately staffed to monitor the issue.
- ITV News Business Editor Joel Hills on the IT issues affecting millions of us
Steve Baker, the Treasury Committee’s lead member for the inquiry, said: “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.
“For too long, financial institutions issue hollow words after their systems have failed, which is of no help to customers left cashless and cut off.”
What does the report recommend?
- The report said there was a "concerning" lack of consistency and accurate recording of data on IT incidents.
- Regulators must have the necessary skills and experience to intervene
- Regulators should increase levies to ensure they can hire staff with necessary experience
- Must main low tolerance for service disruption by providing guidance on what level of impact should be tolerated
- Regulators cannot allow firms to set their own tolerance for disruption too high
- Individuals and firms should be held accountable for their role in IT failures
- If future incidents occur without sanction, Parliament should consider whether the regulators’ enforcement powers are fit for purpose.
TSB suffered a high-profile IT failure last year which left up to 1.9 million customers without access to online banking services.
The MPs said regulators must provide them with the outcome of their investigation into the TSB failure as soon as possible.
Mr Baker said: “For too long, we have waited for a comprehensive account of what happened during the TSB IT failure.
“Our inquiry into service disruption at TSB remains open.”
UK Finance chief executive Stephen Jones said: “UK Finance continues to engage with government over how co-ordination between regulatory authorities could be improved, seeking to avoid overlapped or rushed mandatory change programmes that impact firms’ ability to protect their customers.”