Recent disruptions at major UK banks including Barclays, Halifax, TSB and Lloyds Bank – particularly during critical payday periods – have spotlighted vulnerabilities in the financial system, triggering a debate among industry leaders about necessary reforms to restore consumer confidence.
At the end of February, banking apps including Lloyds Bank and Halifax were significantly impacted, with a flurry of reports on outage monitor Downdetector. Users also reported technical issues with TSB and Bank of Scotland apps.
While the number of reports eventually declined and services were restored, this wasn’t an isolated incident. In January 2025, Barclays app users faced similar disruptions on payday, with some unable to access services for up to three days. The timing made the situation worse, coinciding with HMRC’s self-assessment deadline and a key payroll period.
Concerns about the resilience of banking IT systems have been growing and regulators have taken notice. In early February, the Treasury Committee wrote to nine banks and building societies, requesting details on the scale and impact of IT failures over the past two years. MPs have asked for data on how frequently these failures occur, how long they last, how many customers are affected and how much compensation has been paid out.
Industry experts say banks need to take decisive action to strengthen resilience, modernise outdated systems and improve how they respond to disruptions.
Ensure resilience
Scott Dawson, CEO of payments processor DECTA, says the recurring nature of these outages highlights a critical lack of resilience in the UK financial infrastructure. He called for proactive, industry-wide solutions to strengthen resilience and rebuild public trust.
“Beyond mere inconvenience, these failures disrupt essential payments, impacting livelihoods and business operations. The inability to pay staff or purchase necessities creates genuine hardship. The fact that this follows a similar Barclays mobile outage in January signals a persistent issue, not isolated incidents,” said Dawson.
“Resilience stopped being a buzzword a long time ago – which is a shame because today it’s one of the most important aspects of modern business, especially when a company is handling money. The Treasury Committee’s intervention is timely, but we need proactive industry-wide solutions to ensure resilience and restore public trust. This isn’t just about apps; it’s about the reliability of our financial ecosystem.”
“This is why the introduction of the EU’s Digital Operational Resilience Act (DORA) is so important in establishing regulatory technical standards – one yardstick to measure resilience across every company.”
Lewis Camilleri, founder and CEO of Boshhh Group, a mobile network helping customers boost their credit ratings, says the speed of technological change is putting pressure on banks to evolve faster while maintaining stability.
“Consumers now expect seamless, instant financial services, but the infrastructure behind the scenes isn’t evolving at the same speed,” he said. “Reliability, resilience and accountability must be top priorities, not just for banks but for the regulators overseeing them.
“Right now, both are struggling to balance innovation with stability, and that’s a real concern for the future of financial services.”
Upgrade banking systems
The debate over resilience has also turned attention to the technology banks rely on with many financial institutions still operating on legacy systems that struggle to handle modern transaction volumes.
Robert Kraal, co-founder of payments platform Silverflow, says outdated technology is at the heart of the problem.
“The fintech and banking world are in desperate need of a drastic update – this is a systemic crisis that directly impacts people’s livelihoods,” he said. “For both traditional banks and fintechs, long-term success hinges on a fundamental shift towards core technology modernisation.”
“Investing in scalable, API-first systems, enhanced security, and AI-driven solutions for fraud detection and customer experiences is not a luxury, but a necessity. Building a robust, resilient infrastructure now will not only capitalise on the current boom but also provide a crucial buffer against inevitable downturns.
“The time for incremental fixes is over; a comprehensive, strategic reinvestment in core payments technology is essential to restore customer trust and ensure operational efficiency.”
Leonid Kil from Diagram Capital, an investment firm, agrees that banks must take a more proactive approach to prevent future failures.
“Many banks still rely on legacy systems, limited data centres, single-rail payment networks and slow, manual recovery processes, making them susceptible to disruptions. While fintech’s agility and innovation provide alternative transaction routes and greater resilience, fully preventing such disruptions requires close collaboration between banks and the fintech sector.
“By modernising their infrastructure and adopting fintech-led strategies, banks can enhance stability, improve customer experience, and minimise future outages.”
Strengthen testing and monitoring
Beyond system upgrades, banks should also strengthen their internal processes to prevent failures before they happen, suggests Vino Nandagopalan, financial services growth director at mobile app development company Apadmi.
He says says that while IT failures may stem from a range of issues — technical glitches, third-party vendor failures, or traffic spikes — banks should be doing more to catch them early.
“To mitigate the risk of future outages, developers and financial organisations must implement more robust testing protocols, invest in updating and maintaining IT systems, plan for greater scalability and deploy advanced monitoring tools to address potential issues before they escalate.”
“Customers don’t know the difference between an issue caused by your organisation, or your technical partners – ultimately, it will be your brand trust and image that is damaged by these types of outages. A crucial consideration for large financial organisations is to establish stringent criteria for selecting third-party vendors, as well as conducting regular audits to ensure they adhere to reliability and security standards.”
Communicate more
Even with stronger systems, outages will happen. When they do, banks must be more upfront with customers about what’s happening and how they plan to fix it, say Reena Sewraz, retail editor at consumer group Which?.
“It’s crucial that all affected banks keep customers updated and move quickly to compensate for any losses that may result from outages,” she said.
“Customers should keep evidence of impacted payments should they need to make a claim. If customers have missed important payments, they should contact the relevant company to ensure they waive any fees incurred.”
