Barclays went down from January 31st to February 2nd because of a problem in a ‘critical module of our UK mainframe’, locking people out of their accounts on the day of deadline for self-assessment tax returns.
TSB, Nationwide, First Direct and Lloyds all experience significant problems, with customers were unable to access their accounts on payday.
HSBC customers experienced an outage on mid-February, leaving customers unable to make simple online transactions. NatWest Royal Bank of Scotland and Ulster Bank all have planned outages for their Open Banking services.
Every few weeks we hear this story again: a major bank, an institution that millions of people rely on, can’t be relied upon. Take payments companies and the wider world of financial services into account and it’s more like once a day.
For years now we’ve been hearing a lot about innovation and disruption (“move fast and break things”) and very little about the underlying infrastructure. It isn’t sexy, it doesn’t get multi-billion dollar investments, nobody will appear on the cover of Fast Company for their skills at following proper procedure or coding in COBOL, but it is a vital part of our world, and it seems to be going ignored.
Resilience: Why it Matters
Resilience in payments—the ability to withstand and recover from disruptions—is crucial for a functioning economy. A single outage can prevent individuals from accessing their wages, paying bills, or making essential purchases. For businesses, even a brief interruption can result in lost sales, supply chain disruptions, and reputational damage.
When banking services go down, the impact is immediate and severe. Consumers can be left without access to their money, unable to pay for groceries or fuel. Businesses may be unable to process transactions, leading to lost revenue and operational headaches. Late payments can disrupt cash flow, affecting everything from supplier payments to payroll.
Beyond the direct financial implications, payment failures create a ripple effect that can harm economic growth. If businesses and consumers cannot rely on the banking system, confidence in the economy weakens, potentially discouraging investment and spending.
There are already 1.1 million adults without bank accounts in the UK, and although this figure has been declining increased bank outages threaten to put this into reverse.
Perhaps the most damaging long-term effect of repeated banking outages is the erosion of trust in financial institutions. Consumers expect reliability from their banks. When these expectations are not met, frustration builds, and people begin to question whether their money is safe.
In an era where financial stability is already under scrutiny due to inflation, economic uncertainty, and geopolitical instability, unreliable banking systems add another layer of risk.
Why is it Happening?
Despite the critical role that banking infrastructure plays in the economy, regulation surrounding service resilience remains weak. Banks face relatively little pressure to maintain seamless service, and when disruptions occur, the penalties are minimal.
While financial institutions are heavily regulated in terms of capital requirements and consumer protection, there is no equivalent oversight ensuring the resilience of the digital systems that keep money moving.
Currently, the worst consequence most banks face for an outage is bad PR and non-compulsory compensation claims that are likely to be much less than a complete overhaul of outdated systems.
Customers may vent their frustration on social media, but the reality is that most people remain with their bank even after repeated disruptions: there were only 1.2 million current account switches in the UK in 2024.
Without stronger accountability measures—such as financial penalties or regulatory requirements for faster recovery times—banks have little incentive to prioritise infrastructure resilience.
For customers dissatisfied with their bank’s reliability, switching is often easier said than done.
Legacy banks share many of the same vulnerabilities, and newer fintech players, while innovative, may not yet offer the full range of services consumers need. As a result, many customers feel stuck with institutions that fail to provide a consistently reliable service.
The Systemic Issues Behind Banking Outages
Resilience tends to only be discussed when outages occur. Instead of being a proactive priority, it becomes a crisis response. Banks and regulators need to shift from a reactive mindset to a preventative approach, ensuring that infrastructure investments keep pace with growing digital demands.
Many banks still rely on outdated mainframe systems that were built decades ago. While these systems were once robust, they were not designed for the scale and complexity of modern digital banking.
As layers of new technology are added on top of legacy infrastructure, the risk of failure increases. Without significant investment in modernisation, these systems will continue to be a weak link in financial stability.
The Need for a Renewed Focus on Resilience
The frequency of banking outages should serve as a wake-up call for financial institutions and regulators alike. As digital transactions become the backbone of daily life, resilience must be prioritised alongside innovation.
Banks need to invest in modernising their infrastructure, regulators must enforce stricter service reliability standards, and consumers should have greater transparency around the reliability of financial service providers.
The financial system cannot afford to be an unreliable backbone of the economy. Without action, the question isn’t whether another major outage will occur—it’s when.
Scott Dawson is the CEO of fintech group DECTA.
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