UK Banking IT Failures and Security Concerns

Jan. 7, 2025 /Mpelembe Media/ —  New research from the UK reveals that a significant portion of the British public is keeping cash on hand due to concerns about banking IT failures. One in four Brits report this behaviour, highlighting a growing distrust in digital banking systems. Concerns centre on the frequency of IT outages and the potential for data breaches, impacting consumer confidence. The research underscores the need for banks to improve IT security and transparency to reassure customers.

Several aspects of growing concern related to the reliability of digital banking services:

Consumer Uncertainty: There is a growing uncertainty amongst consumers regarding the reliability of digital financial services, particularly as in-person banking becomes less available. This general uncertainty is a key concern.

IT Failures: A significant worry stems from the potential for IT failures within banks. Over a third (34%) of UK banking customers are concerned about IT failures. Moreover, one in six (17%) people have already experienced IT-related disruptions, with an average disruption time of six hours. Such failures prevent customers from accessing funds or paying for essential services.

Third-Party Technology: There’s also a growing worry about the reliability of third-party technology providers that support banks. A substantial 38% of respondents are concerned about the potential of these organisations causing an IT outage at a bank. This indicates a lack of confidence in the extended infrastructure supporting digital banking.

Cybersecurity: Concerns also extend to cybersecurity, with 42% of those surveyed expressing worry about cyber-attacks potentially leading to personal information theft. This highlights a fear of data breaches and the potential loss of sensitive information.

Precautionary Measures: As a direct result of these fears, 25% of Britons are now keeping cash on hand as a precaution against digital banking outages. This illustrates a lack of full trust in the current digital banking system.

Over a third (34%) of UK banking customers are worried about the potential of IT failures at their banks. This is a significant concern, and contributes to the fact that 25% of Britons now keep cash on hand as a precaution against such outages. The sources also indicate a general trend of growing uncertainty among consumers about the reliability of digital financial services, especially as in-person banking declines.

When people are affected by IT failures within their banks, they face an average disruption time of six hours. This disruption means they are unable to access their funds or pay for essential goods and services. This has led to a wider sense of uncertainty about the reliability of digital banking.

In summary, the reliability of digital banking is a complex issue with concerns ranging from IT failures and third-party dependencies to cybersecurity and data protection. The overall effect is a growing uncertainty among consumers and a loss of trust in the system, leading to precautionary measures like keeping cash on hand.

According to the sources, banks must now refund fraud victims up to £85,000. This is due to new Payment Systems Regulator (PSR) guidelines that came into effect on 7th October. This regulation reinforces the importance of customer protection and proactive fraud prevention.

The research group state that the data comes from GFT’s latest Banking Disruption Index.