The new year got off to a disappointing start for thousands of customers of Lloyds Banking Group when a system outage prevented them from accessing internet and mobile banking services on New Year’s Day.
Thousands of customers across all three retail banks under the group’s banner — Halifax, Bank of Scotland and Lloyds — were affected for nearly eight hours from about 4 am on Wednesday, the bank said.
The failure — not thought to be caused by a cyber attack but rather down to an internal issue — was rectified by midday, a spokeswoman said.
“Internet and mobile banking is now back to normal,” the bank said in a statement on January 1. “We’re sorry that some of our customers had issues with it this morning.”
Customers took to social media to rail against the outage, particularly because many direct debits are due on Thursday. One customer complained that Lloyds was “taking the ‘bank holiday’ a little too literally”.
Lloyds reported the incident to financial regulators and is in dialogue with them. “We are aware of the issue and are in contact with Lloyds to ensure its customers are treated fairly,” said a Financial Conduct Authority spokesman.
The outage means that despite big banks’ best resolutions — and the ire of politicians and regulators — the trend for IT failures looks set to continue in 2020.
Scrutiny of IT issues at financial firms has increased since a series of high-profile problems at companies including TSB and Visa in 2018. The Treasury select committee said in October that there was an “unacceptable” level of IT failures among banks.
The financial sector has been put on notice by the FCA and the Bank of England to test scenarios for dealing with system outages and cyber attacks, with senior executives placed in the line of fire and the threat of higher capital charges for lenders taking insufficient steps.
TSB is still being investigated by the FCA and the BoE for its 2018 outage, one of the worst in UK banking history, which led to 2m people being locked out of their accounts.
The FCA reported a 138 per cent increase in technology outages in 2018. The impact of such problems has grown as customers have moved to online and phone banking.
Problems are often blamed on the complex IT systems of high-street banks, which have been built up piecemeal through decades of incremental upgrades and acquisitions. However, several new lenders have also run into difficulties because of third-party suppliers.
