MPs launch inquiry into banking IT failures

The Treasury Select Committee is to launch an inquiry into IT failures in the financial services sector after a series of meltdowns at High Street banks left millions of customers facing disruption to their online banking services.

MPs on the influential parliamentary committee said they will examine the operational resilience of IT systems at banks and financial institutions, and their ability to get services back up and running if a failure occurs.

The inquiry, which will appoint a specialist advisor, comes after a customers at Barclays, HSBC and Royal Bank of Scotland were unable to access their accounts, along with repeated outages at digital bank TSB following a botched IT migration in April.

The probe will test banks’ ability to prevent disruption, rectify system failures and provide adequate compensation for customers, as well as find out whether regulators have the relevant skills to hold financial services providers to account.

The committee is requesting evidence from financial services institutions to build up a picture of the sector’s ability to ensure technology and digital banking services are providing customers with an acceptable level of service, many of whom have suffered from the closure of local branches.

The chairwoman of the committee, Conservative MP Nicky Morgan, said the number of IT failures at banks and other financial institutions in recent years - including Equifax, TSB, Visa, Barclays, Cashplus and RBS - had been “astonishing”, with millions of customers affected.

“Measly apologies and hollow words from financial services institutions will not suffice when consumers aren’t able to access their own money and face delays in paying bills,” she stated. “As bank branches close and customers are ushered towards online services, the availability of those services is vital.

“The committee has launched this inquiry to consider the causes and consequences of these failures, and will examine what industry and regulators are doing to promote operational resilience.”

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