How IT resilient are banks?

There has been in recent months a considerable focus on consumer attitudes towards specific elements of digital banking, whether that be the digitisation of savings and investment products, travel services or fraud protection.  

This time, however, let us examine a more holistic view on how consumers feel about the security of their bank, their increasing use of digital channels, and their trust in their bank’s IT resilience. This topic is particularly pertinent right now, given some of the large-scale outages we witnessed in 2024 – most notably the huge IT failure brought about by CrowdStrike, which impacted organisations across the globe and saw entire industries grind to a halt.
 

Such worldwide outages have enormous ripple effects on consumer trust in technology, not only in their banks, but across all businesses from whom they purchase goods or services.  

Examining consumer attitudes 

A recent survey of the British public aimed to understand how concerned they are about possible technology outages, how many people have been impacted to date by IT failures, and what – if any – measures people are taking to protect their money from future outages. 

The survey also wanted to understand more about the public’s sentiment towards the potential of a future ‘cashless’ society. A future without physical banknotes and coins has been an ongoing topic of discussion across the financial services industry and its customers for many years, dividing opinion between those who believe it could be a major force for good and those who claim it could exclude various groups in society. 

The survey questioned consumers to understand whether banking resilience has an impact on their attitudes towards a cashless future, and whether they will ever be open to permanently swapping their real wallet for a digital one. 

Cyber security outage 

On 19th July 2024, an outage at cybersecurity company CrowdStrike impacted 8.5m Microsoft Windows devices globally that unknowingly relied upon this software, with individuals and organisations facing what has become known as the ‘blue screen of death’. Individual PCs, and those running business systems and consumer services suddenly could not operate and deliver any services creating massive disruption. 

The scale of the outage meant critical industries such as financial services, healthcare, transport and many others were hugely impacted, with customers unable to access key services for hours – and in some cases days. 

Whilst the CrowdStrike incident has become known as one of the worst global IT outages in history, it was not the only technology failure that impacted industries, businesses and the public in recent times.  

In fact, the UK financial services industry was faced with an outage just 24 hours prior to CrowdStrike’s failures, when an issue at Clearing House Automated Payment System (CHAPS) on 18th July 2024 delayed high-value payments (such as house purchases and other high value transactions) for thousands of customers using their system.  

Consequences 

The financial services industry is rightfully placed under more scrutiny than many other business sectors when it comes to resilience. However, a recent investigation by Which? found that UK banks face IT failures serious enough to stop customers from being able to make payments, on a daily basis. If such a situation arises and cannot be resolved, it can have an enormous impact on consumer attitudes towards their bank.  

The consequences of these failures on banks can be significant, eroding customer trust and the sector’s reputation overall, ultimately hampering the bottom line of those financial institutions affected by such IT challenges. 

Such outages highlight the need for a continued focus on IT resilience. Those financial institutions that have robust and proactive approaches to IT security and resilience, will ultimately be those that engender long-term trust and loyalty amongst their customers.