Barclays Faces £12.5M Payout Over IT Failures
Barclays is set to pay up to £7.5 million in compensation after a major IT failure left millions of customers unable to make payments. The outage, which started on January 31st, lasted several days and disrupted more than half of the bank’s online transactions. The failure was caused by a "severe degradation" in its mainframe system, and hit customers particularly hard as it coincided with payday and the self-assessment tax return deadline.
This latest incident adds to a troubling trend of frequent banking outages across the UK. A Treasury Committee investigation found that the country’s top nine banks and building societies experienced more than 33 days’ worth of unplanned tech failures in the past two years. Barclays had the highest number of incidents, with 33 outages recorded before the latest failure. Including previous payouts for earlier outages in the last two years, the bank’s total compensation bill could reach £12.5 million.
The committee’s investigation also found that IT failures across banks are often linked to third-party supplier issues, system updates, and internal software malfunctions.
Treasury select Committee chair Dame Meg Hillier expressed concern over the scale of these failures, stating, “The fact there has been enough outages to fill a whole month within the last two years shows customers’ frustrations are completely valid.” She emphasized the importance of banks reacting quickly and compensating customers fairly.
Barclays UK chief executive Vim Maru also acknowledged the disruption and apologised for the impact of the outages on customers. “We acknowledge that through no fault of their own, some of our customers and clients may have suffered loss or distress and inconvenience,” he wrote in a letter to the committee. He assured the committee that the bank acted swiftly to inform customers of the problem and is working to prevent similar issues in the future.
With continued scrutiny on the banking sector, customers and regulators alike will be watching closely to see how banks address these ongoing reliability concerns.
