MPs have warned that more needs to be about the “unacceptable” level of IT failures and crashes that banks are experiencing. They say that more regulation and financial levels need to be put in place.
Published on Monday, the Treasury Committee report said that because so many major banks are now moving to the web, it is vital to ensure that online banking works correctly and that customers are no longer being left “cashless and cut off”.
Following a cyberbanking failure at TSB last year, 1.9 million people were cut off from their online banking accounts.
More needs doing
The report implies that banks should be doing much more to ensure that IT systems are more resilient to failures. It also suggests that firms need to do more to ensure complaints and compensation are resolved more quickly.
To help solve this, more money needs to be injected into IT services, the report says.
A major point that MPs are concerned about is the use of third-party providers and the effect this has on security. This is a particular worry when using cloud services for data storage and computing power as it “stood out as such a source of systemic risk”.
“The consequences of a major operational incident at a large cloud service provider, such as Microsoft, Google or Amazon, could be significant,” the report said. “There is, therefore, a considerable case for the regulation of these cloud service providers to ensure high standards of operational resilience.”
Harm already caused
As well as pointing out the worrying lack of consistent data reports after an IT failure happen, Steve Baker, the Treasury Committee’s lead member on the inquiry, also said: “The number of IT failures that have occurred in the financial services sector, including TSB, Visa and Barclays, and the harm caused to consumers is unacceptable.”
He continued: “The committee, therefore, launched this inquiry to look ‘under the bonnet’ at what’s causing the proliferation of such incidents, and what the regulators can do to prevent and mitigate their impacts…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.”